TIDMALS
RNS Number : 7839J
Altus Strategies PLC
29 April 2022
Altus Strategies Plc / Index (EPIC): AIM (ALS) TSX-V (ALTS)
OTCQX (ALTUF) / Sector: Mining
29 April 2022
Altus Strategies Plc
("Altus" or the "Company")
Audited Final Results
Altus Strategies Plc (AIM: ALS, TSX-V: ALTS, OTCQX: ALTUF)
announces its audited final results for the year ended 31 December
2021. These are presented below and are available (along with the
Company's 2021 Annual Report) to download on the Company's website
at http://altus-strategies.com/investors/financials/ and on SEDAR
at www.sedar.com .
Corporate highlights
-- Acquisition of an effective 0.418% Net Smelter Return (" NSR
") royalty on the Caserones copper mine (" Caserones ") in northern
Chile for US$34.1m
-- Caserones royalty acquired via a strategic 50:50 partnership
with NYSE-American and TSX-V listed EMX Royalty Corp (" EMX ")
through a Chilean special purpose vehicle (" SPV ")
-- Receipt of maiden royalty income of GBP1.7m (before tax) in
respect of Q2 and Q3 2021 production at Caserones
-- Acquisition of 24 royalty interests from Newcrest Mining Ltd
(" Newcrest ") for US$24.0m, including royalties on two producing
gold mines, one near-producing gold mine and 21 development and
exploration stage projects (23 of which are located in Australia
and one in Côte d'Ivoire)
-- Newcrest royalties acquisition undertaken through a strategic
joint venture with private company AlphaStream Limited ("
AlphaStream ") through SPVs in United Arab Emirates and Australia;
first close of the acquisition covering all assets except nine
development and exploration stage assets for US$20.0m
-- US$29 million strategic acquisition loan facility provided by
the Company's largest shareholder La Mancha Fund SCSp (" La Mancha
")
-- Moroccan portfolio of 14 primarily silver and copper projects
to be vended to Eastinco Mining and Exploration Plc (" Eastinco ")
subject to Eastinco listing on the Standard List of the London
Stock Exchange; Altus to retain NSR royalty rights on all projects,
to gain a royalty right on Musasa tantalum mine in Rwanda and to
become a major shareholder of Eastinco
-- Appointments to the senior management team strengthen the
Company's corporate and technical capabilities across its key areas
of operation:
o Mark Campbell appointed as Non-Executive Chairman of 100%
owned subsidiary Akh Gold Holdings Ltd and General Manager
(Egypt)
o Amilha Young appointed as Company Secretary and Legal
Counsel
o Boubacar Thera appointed as Corporate Manager (Mali)
o David Hall appointed as Strategic Advisor (Egypt)
Operational highlights
-- Expansion of activities into Egypt through award of gold
exploration licences, forming four projects, totalling 1,565km(2)
located in the Eastern Desert through a competitive international
bidding process; discovery of numerous hard rock artisanal gold
workings from field reconnaissance at Gabal Om Ourada and Wadi
Dubur projects
-- Western Mali: High grade intersections including 21.9 grams
per tonne (" g/t ") gold (" Au ") over 10.2m from 28m from diamond
drilling (" DD ") at Diba gold deposit in western Mali (results are
down-the-hole and not true widths)
-- Southern Mali: Gold resource exceeds one million ounces (17.3
million tonnes at 1.2 g/t Au for 665,000 inferred ounces and 9.2
million tonnes at 1.2 g/t Au for 360,000 indicated ounces) at
Tabakorole gold project in Southern Mali under Joint Venture (" JV
") with Australian Securities Exchange (" ASX ") listed Marvel Gold
Ltd (" Marvel Gold ") (see Altus' news release "Gold Resource
Exceeds One Million Ounces at Tabakorole in Southern Mali" dated 5
October 2021). Upgraded Mineral Resource Estimate (" MRE ")
generated a 24% increase in indicated ounces and 7% increase in
inferred ounces, with 70% of deposit comprising the MRE within 150m
of the surface; encouraging DD results and discovery of a potential
new parallel zone of mineralisation; significant increase in JV
landholding at Tabakorole (by 100km(2) to 292km(2) )
-- Morocco: Grant of 10 new exploration licences taking the
Company's portfolio to 14 projects covering 824km(2) targeting
primarily copper and silver; discovery of high-grade copper and
silver from reconnaissance exploration at the newly granted Azrar,
Izougza and Tata projects
-- Completion of strategic review of Bikoula iron project in
southern Cameroon by Mining Plus UK Ltd (" Mining Plus ") to
determine next steps for project development
Financial highlights
-- Completion in March 2021 of oversubscribed fundraising for
GBP7.7m / C$13.4m at an issue price of GBP0.75 / C$1.30 per
Ordinary Share with net proceeds primarily used to accelerate gold
exploration programmes in Egypt and Mali
-- Receipt of second tranche of 10 million shares in Canyon
Resources Ltd (" Canyon ") with a value at the time of GBP0.6m /
C$1.1m
-- Completion in December 2021 of oversubscribed fundraising for
GBP19.8m / C$33.7m at an issue price of GBP0.535 / C$0.90 per
Ordinary Share with net proceeds primarily used for completion of
the Newcrest royalty acquisition
-- Cash balance of GBP6.4m / C$10.9m as at 31 December 2021
-- Cash outflow from operating activities of GBP7.9m / C$13.4m for the year
-- Listed equity holdings of GBP1.7m / C$2.9m as at 31 December 2021
Post-period end
-- Second and final close of the Newcrest royalties acquisition
covering nine development and exploration stage assets located in
Australia for consideration of US$4.0m
-- Completion of 11,832m drilling programme at Diba and Lakanfla
gold project with latest results of up to 1.27 g/t Au over 127m
from 21m on the Lakanfla Central prospect and 1.81 g/t Au over 10m
from 256m at the Diba NW prospect (results are down-the-hole and
not true widths)
-- Extension of La Mancha loan facility to 30 June 2022 with
annualised interest rate increased to 10% plus the United States
Dollar (" USD ") London Inter-bank Offered Rate (" LIBOR ")
-- 1.0% Gross Revenue Royalty (" GRR ") generated on Toura
Nickel-Cobalt project in Côte d'Ivoire through sale of interest in
local subsidiary to Firering Strategic Minerals Plc (" Firering ")
for EUR15,000
-- Revised joint venture agreement signed with Marvel Gold
whereby the Company regained a 100% interest in the Lakanfla
licence in western Mali, located 5km east of the Company's Diba
project, and reduced its interest in the Tabakorole gold project in
southern Mali to 30%; Altus retains a 2.5% NSR royalty on the
Tabakorole project
-- Award of a ten year (renewable) mining licence at the Agdz
project in central Morocco covering an area of 34.36km(2) ,
representing the area of copper and silver mineralisation
discovered to date
-- Award of a four year (renewable) 'small scale' mining licence
at the Diba gold project in western Mali covering an area of
83.1km(2) , incorporating the Diba Deposit and other key
prospects
Steven Poulton, Chief Executive of Altus, commented:
"2021 marked another milestone year for Altus. With the
acquisition of an NSR royalty on the Caserones copper mine in Chile
and receipt of the maiden royalty payment just a month after
closing the deal transformed Altus into a revenue generating
business. Later in the year, we acquired a portfolio of 24 royalty
interests from Newcrest Mining Ltd. The Newcrest portfolio includes
royalties on two producing gold mines, one near-producing gold mine
and 21 development and exploration stage projects, bringing the
Company's global portfolio to 33 royalty interests and 27 project
interests across nine countries and nine metals.
"Operationally, our focus during the period was on advancing and
de-risking our royalty generation assets, primarily in Mali and
Egypt. In southern Mali, an updated independent Mineral Resource
Estimate at the Tabakorole gold royalty and JV project reported
that gold resources now exceed one million ounces and there remains
significant potential for further growth in parallel zones, along
strike and at depth. Elsewhere in western Mali, diamond drilling we
completed at the Company's 100% owned Diba gold project returned
impressive high-grade intersections and discovered new zones.
Earlier this month, post-period, Altus was granted a small-scale
gold mining licence for Diba; an important step as we now progress
with an updated MRE and Preliminary Economic Assessment for the
combined Diba & Lakanfla project. In Egypt, Altus was awarded
highly prospective gold exploration licences totalling 1,565km(2)
in the Eastern Desert, which we consider has world class discovery
potential. Systematic exploration and target evaluation is already
underway across these projects.
"Altus is exceptionally well-positioned to progress with its
royalty generation activities across Africa while also reviewing
accretive royalty income acquisition opportunities. The Company has
a strong pipeline of transactions under review and we intend to
further enhance and diversify our portfolio in the coming years
growing our revenue streams in parallel.
"2022 is on course to be another highly productive year for the
Company and we look forward to providing further updates in due
course. "
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 Corporate Finance LLP (Nominated
Adviser) Tel: +44 (0) 20 3470 0470
Richard Morrison / Adam Cowl
SP Angel Corporate Finance LLP (Broker)
Grant Barker Tel: +44 (0) 20 3470 0471
Rob Rees Tel: +44 (0) 20 3470 0535
Shard Capital Partners LLP (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. Its 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. Altus
has established a global portfolio comprising 33 royalty interests
and 27 project interests across nine countries and nine metals. The
Company continues to assess royalty acquisition opportunities as
well as actively advancing its portfolio of gold and base metal
projects across Africa, as part of its 'boots on the ground'
royalty generation strategy. Altus 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 .
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 NI 43-101.
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.
Chairman's Statement
Reflection on the year
I am delighted to be able to report on a steep and
transformational growth trajectory for Altus during the past year.
The long-held business strategy of holding a diverse portfolio of
royalties and discovery projects took a series of strong steps
forward in 2021.
Perhaps the most significant new development was the acquisition
of an interest in a cash-paying royalty at the Caserones copper
mine in northern Chile. Not only was this the initial example of
the parallel strategies of royalty acquisition and royalty
generation working together in the business, it was also the
Company's first asset outside of Africa as well as being a first in
terms of taking a joint venture approach with a royalty partner.
Within a month of the acquisition, we were delighted to report that
the first royalty revenue was received in Altus' bank account.
In the same month that the first Caserones royalty was received,
the Company opened a branch office in Cairo. Having been notified
of the success of its bid for approximately 1,550km(2) of gold
exploration licences in Egypt's highly prospective Eastern Desert,
our team began setting up the operations of our Egyptian
subsidiary, Akh Gold Limited. In just a few months, the Company has
built a team of talented and well-connected local geologists and
support staff, including the appointment of Mark Campbell as Akh
Gold's General Manager. Having completed the formalities for
officially receiving the exploration licences, the team has rapidly
commenced reconnaissance work across the nine licence blocks that
make up the four projects. The area covered by these four projects
is vast and largely unexplored, and offers a fantastic opportunity
for the Company to make some exciting discoveries. The exploration
bid process in Egypt has attracted major industry players including
Barrick Gold, Centamin and B2 Gold amongst others.
Caserones and Egypt together perfectly illustrate the parallel
strategy of royalty acquisitions that, as well as providing short
term returns, also contribute to the Company's discovery
activities, which, over time, offer the prospect of significant
shareholder returns. In the coming years the team at Altus will
seek to maintain the optimal balance of short term capital returns
and long term income exposure across our portfolio of assets.
Altus finished the year strongly with the acquisition of a
significant, high quality portfolio of predominantly gold metals
royalties in Australia and Côte d'Ivoire, including the cash-paying
or near-production royalties at the Ballarat, SKO and Bonikro
mines. Altus started the year holding nine royalties - it ended it
holding 24, a great achievement and a substantial platform for the
future of the Company.
Management and Board
For a company of our size, Altus has a strong and experienced
senior management team, Board of Directors and corporate governance
procedures. There were no changes to the composition of the Board
during the year, but following the year end, Gérard de Hert was
appointed as a non-executive director. Gérard is the Managing
Director of Technical Services at La Mancha, our largest
shareholder, and, in accordance with the Strategic Investment
Agreement with La Mancha of February 2020, he represents La
Mancha's second appointee to our Board alongside La Mancha's CEO
Karim Nasr. Prior to joining La Mancha, Gérard held senior
management positions with a number of Africa-focused multinational
gold miners, and his technical expertise in the exploration and
development of mines in Africa will be of considerable value to
Altus. I welcome Gérard as a director and look forward to working
with him.
During the year, a number of key management appointments were
made that further strengthened the Company's corporate and
technical capabilities in line with our growth. Amilha Young was
appointed Company Secretary and Legal Counsel. Amilha has over 20
years' experience in corporate governance in the financial services
and natural resources sectors in Africa and the UK. Mark Campbell
who lives in Cairo joined as the General Manager in Egypt, a key
appointment in the establishment of the Company's business in
Egypt, and was also appointed Non-executive Chairman of Akh Gold
Holdings Ltd. Mark has over 40 years' experience in the mining,
investment banking and petroleum industries, with 31 of those years
being in Egypt. Also in Egypt, David Hall joined us as Strategic
Advisor for Egypt, bringing 35 years of experience in the
exploration and mining sector assessing exploration projects and
mines in over 55 countries. In Mali, Boubacar Thera was appointed
as Corporate Manager, to support our operations there,
specifically, as we advance our 100% owned Diba & Lakanfla gold
project, and to enhance the Company's profile in the region.
Boubacar is a Malian lawyer with over 25 years' professional
experience in the natural resources industry in Africa focused on
contract, joint venture and mining title negotiations.
After the year end, the Company's business development team was
strengthened. Michael Starke was appointed VP Corporate Development
to support the realisation of value from Altus' growing asset
portfolio as well as to manage corporate communications. Michael
has over 14 years' experience in corporate finance and will support
Alister Hume, who was promoted to Chief Investment Officer, having
played a pivotal role in the acquisitions of the Caserones royalty
and the portfolio of royalties in Australia and Côte d'Ivoire from
Newcrest.
Looking forward
The energetic team at Altus never lets the grass grow under its
feet. Notwithstanding the effort that has gone into advancement of
the Company along its strategic path during 2021, I have no doubt
that the team will pursue new opportunities with diligence and
resolve, and will work with intelligence and commitment to develop
and grow Altus' exciting portfolio of royalties and projects.
On behalf of the Board, I thank the entire team at Altus for
their contributions to a momentous year, and I thank our existing
and new shareholders for their continued support.
David Netherway
Non-executive Chairman
Business Overview
Our royalty generator business model
Altus is a mining Royalty Generator focused on becoming a
leading royalty business. The Company is based in the United
Kingdom and dual-listed in the UK (AIM: ALS) and Canada (TSX-V:
ALTS). Its shares also trade in the United States (OTCQX: ALTUF).
The Company was founded by three of its current directors in 2007;
namely Steven Poulton, Matthew Grainger and David Netherway. Since
its formation, Altus has developed a portfolio of resource assets,
diversified by commodity and jurisdiction and it has sought
partnerships on our assets to further reduce risks and accelerate
its growth. The team's track record of success in Africa and
differentiated business model has also attracted notable
institutional and other sophisticated investors. La Mancha is one
such group, which joined the Company's register in 2020 as the
largest shareholder with a 35% interest. As one of the world's
largest and most respected mining investors, La Mancha's
involvement has been transformational for the Company and the
growth of both elements of its two-pronged strategy of generating
royalties and increasing value per share, namely the Acquisition
Strategy and the Discovery Strategy.
The Acquisition Strategy focuses on accelerating the growth of
the Company's portfolio and cash flows through the acquisition of
existing royalties on third party mines and development projects
around the world, or by royalty creation through the provision of
strategic capital to select mining and exploration companies. Our
acquisition strategy aims to expand the Company's royalty
portfolio, provide further diversification, maintain a high degree
of quality assets to yield long term, sustainable income for Altus
from cash-generating assets. This approach provides Altus with a
steadily growing stream of lower-risk cash flows which it can
deploy to further grow its royalty portfolio and to fund its
discovery strategy.
The Discovery Strategy provides the Company's shareholders with
exposure to the potentially significant outsized returns which can
be generated from the success of targeted discovery work.
Leveraging the Company's expertise and proven ability to identify
and rapidly advance early-stage prospects, Altus aims to generate
high-value projects by selectively acquiring multiple exploration
licences in diverse jurisdictions and advance these through
targeted appraisal undertaken by the Company's exploration
geologists. As projects progress up the 'value curve', the Company
typically enters JVs with third parties who fund advanced
exploration and development, thereby reducing risk and preserving
shareholder capital for investing in further opportunities. Income
is generated through JV milestone payments which occur at
exploration and development landmarks. As each project matures and
develops, Altus' ownership may dilute but the Company looks to
retain a minority equity position as well as a royalty, providing
longer term optionality and cash flow potential once the project
enters production.
Discovery Strategy focused on Africa
While Altus's acquisition strategy targets assets in all parts
of the world, the Company's discovery strategy is focused on the
continent of Africa where, due to the relative lack of exploration
using modern techniques compared to many other parts of the world,
economic mineral deposits can still be discovered close to and in
many cases cropping out at surface.
It is reported that 24% of all discoveries in the last decade
were found on the continent of Africa, despite it receiving only
14% of the global exploration budgets (source: MinEx Consulting).
According to the same survey, deposits in Africa (excluding South
Africa) are being discovered at average depths of just 9m below
surface, which is much shallower than average global depths of 78m.
In Canada and the USA the average discovery depths are even
greater, at 125m and 198m respectively.
This opportunity to make discoveries across Africa without
recourse to expensive subsurface exploration technologies,
including drilling programmes, means that our shareholder capital
can potentially generate more value and at greater speed if applied
to exploration in Africa than it might in many other parts of the
world, thus increasing the discovery potential per Altus share.
Given the collective geographical, geological and operational
expertise of our board, management and advisors, we believe Altus
is well positioned to maximise this opportunity. The Company
currently has interests in exploration licences in Egypt, Mali,
Morocco, Cote d'Ivoire, Cameroon and Ethiopia.
Risk diversification
Risk diversification is at the heart of the Company's business
model and is enacted by diversifying our asset portfolio across a
variety of metals at different stages across several jurisdictions.
Altus has a growing portfolio of 33 royalties comprising four
royalties on producing mines, 15 royalties on development projects
with mineral resources and 14 royalties on pre-resource projects,
as of the publication date of this report. In addition to the
royalty portfolio, the Company's project pipeline comprises 24
exploration projects, of which one is under JV (Tabakorole in Mali)
while the Company's 14 Moroccan projects are in the process of
being spun out into Eastinco Mining and Exploration plc which is
seeking to list on the London Stock Exchange. Together, the
Company's royalties and projects span nine countries and encompass
nine commodities.
More than half of the Company's discovery portfolio is comprised
of gold projects, the most advanced of which are located in western
Mali. Aside from gold, Altus is focused on metals that it believes
will be critical in the transmission, storage and efficient use of
electricity in the coming decade, as the world seeks to decarbonise
and implement 'Net Zero' policies. Copper will be paramount among
these. Other metals such as nickel, cobalt, lithium, vanadium and
aluminium also have a critical part to play, as will specialist and
less well-known rare-earth metals, including neodymium and
praseodymium that are used in the high-quality magnets of electric
motors.
Chief Executive's Review
The year in summary
Acquisition of cash paying royalties
As our Chairman has highlighted, the acquisition of a royalty on
the Caserones copper mine in northern Chile perhaps marked the most
significant milestone for the Company in the year. Our team had
been working hard to deliver on the Company's publicised parallel
strategy of acquiring cash-paying royalties alongside generating
our own royalties. This hard work came to fruition in August when
an agreement was signed for the purchase of a 0.418% NSR copper
royalty for $34.1 million. The Caserones mine is situated in a
Tier-1 jurisdiction and at that time represented our first asset
outside of Africa. The mine is owned and operated by JX Nippon
Mining & Metals Corporation of Japan and had an estimated
minimum 17 years of production remaining at the time of our NSR
acquisition.
The Company was delighted to secure the acquisition of the
Caserones royalty in partnership with NYSE-American and TSX-V
listed EMX Royalty Corporation. Altus and EMX worked closely
together on the deal and incorporated a special purpose vehicle in
Chile which is jointly owned and managed by Altus and EMX. The
Company's partnership with EMX is strengthened by Michael Winn, who
is the Chairman of EMX, as well as being a Non-Executive Director
of Altus.
The commitment made to the long-term development of Altus by our
significant 35% shareholder, La Mancha, was underscored through the
provision of a US$29.0 million acquisition bridge loan facility,
which was drawn down to part-fund the acquisition. The facility,
which was repayable in February 2022, has since been extended to 30
June 2022. The Company does not yet have alternative financing in
place but has received a number of proposals to re-finance the
loan.
Following the closing of the Caserones transaction, the team
quickly moved on to its second acquisition of the year, which
closed in December 2021. This deal saw Altus acquire interests in a
portfolio of primarily precious metal royalties from Newcrest
Mining Ltd for US$24 million. The portfolio includes two current
gold mines and one near-production gold mine as well as 21
near-term development and exploration stage projects. All but one
of the projects are located in Australia, further diversifying
Altus' portfolio and adding another Tier-1 jurisdiction, the other
is in Côte d'Ivoire, where Altus already holds royalties on two
self-generated projects, one for gold and one for
nickel-cobalt.
The first income from the Ballarat and SKO royalties in
Australia was received in March 2022, which, together with
Caserones, brought the quarterly gross income from royalties to
approximately US$1.8 million.
For the transaction with Newcrest, Altus was delighted to be
working with another royalty partner, AlphaStream Limited, a
specialist mining royalty investment and streaming company. Altus
and AlphaStream incorporated two SPV's one of which holds a 100%
interest in an Australian subsidiary holding the Australian royalty
assets, and the other which holds the royalty asset in Côte
d'Ivoire directly.
The transaction with Newcrest was supported by a placing and
subscription of new Ordinary Shares raising US$26.1 million from
both existing as well as new institutional investors alongside a
concurrent subscription by the Company's major shareholder, La
Mancha, as well as various Altus directors, officers and other
investors. Further details of the royalties acquired in Chile,
Australia and Côte d'Ivoire are provided in the portfolio review on
pages 31 to 34.
Our Portfolio of gold projects in Mali
The Company has made notable progress during the year on its
Diba and Lakanfla gold project in western Mali, where a series of
drilling programmes has been undertaken across the project
targeting strike extensions and new zones of mineralisation. Altus
took the decision to self-fund these drilling programmes to
accelerate advancement of the project, and to build on the MRE and
PEA produced by Mining Plus UK Ltd in 2020.
In January 2022 Altus regained 100% ownership of the Lakanfla
licence from its joint venture partner Marvel Gold. Lakanfla is
located just 5km east of the Diba licence and is considered to be
highly prospective based on previous exploration programmes and the
presence of substantial hard rock artisanal gold workings. The
drilling programme was expanded to test the on strike and down-dip
potential of the Diba Deposit, Diba NW prospect and the Lakanfla
Central prospect. An updated MRE and PEA for the combined Diba and
Lakanfla project will be prepared once the results from the
drilling programmes have been assessed.
In southern Mali, progress has continued with our joint venture
on the Tabakorole gold project funded by partner Marvel Gold. An
updated MRE on Tabakorole was published in October 2021 and
exceeded one million ounces, (comprising 17.3 million tonnes at 1.2
g/t Au for 665,000 ounces ("oz") in the Inferred category, 9.2
million tonnes at 1.2 g/t Au for 360,000oz in the Indicated
category). This is a major milestone for the project, and includes
70% of the upgraded MRE being within 150m of surface complemented
by high metallurgical gold recoveries averaging 97%. Tabakorole is
shaping up to be a potentially significant gold development project
in west Africa with substantial upside for Altus. At the year end,
Altus held a 49% interest in Tabakorole, which has since been
reduced to 30% in line with the JV agreement. Altus holds a 2.5%
NSR royalty on the Tabakorole project.
A new portfolio of gold projects in Egypt
The establishment of operations in Egypt in 2021 represents
perhaps the most significant expansion of our activities since our
plan of arrangement with TSX-V listed Legend Gold in 2018 for its
portfolio of gold projects in Mali. Nine licences were awarded to
Altus in Egypt in 2021, from the internationally competitive
inaugural licence bid round process. The licences form four
distinct project areas and cover a substantial area of the highly
prospective Eastern Desert. By the end of the year, exploration was
already underway on two of the projects, namely Gabal Al-Shaluhl
and Wadi Dubur, representing 1,044km(2) of the 1,565km(2) of the
Company's licence base in Egypt.
The ramp up of operations has been swift. An office has been set
up in Cairo managed by Mark Campbell, our newly appointed General
Manager in Egypt, ably supported by an enthusiastic and
well-connected technical and administrative team. The Company is
also delighted to have David Hall on the team, as Strategic Advisor
for Egypt.
I am extremely pleased with the development of our growing and
high-calibre team in Egypt and confident that they will make rapid
progress in advancing our projects in the coming year. While
exploration is still in its early stages, our initial
reconnaissance is revealing a high incidence of hard rock artisanal
gold workings within highly prospective geological belts which
underscore the very high prospectivity of our licences.
Further details of the Company's discovery assets are provided
in the Portfolio Review - Discovery Projects Portfolio on pages 36
to 48.
Divestment of Moroccan silver and base metal portfolio
Our royalty generation business is dynamic and predicated on our
ability to make new mineral discoveries and monetise these for
royalty interests, plus cash and equity. The sale of the Company's
fourteen, primarily copper and silver, exploration projects in
Morocco is in line with this strategy. We signed an agreement with
Eastinco in November 2021 to divest Altus' interest in its Moroccan
projects. Subject to the admission of the shares of Eastinco onto
the LSE Standard List, Altus will become a material shareholder of
Eastinco holding up to 25% of the issued capital, receive a
reimbursement of up to GBP250,000 in respect of exploration
expenditures incurred and retain a 2.5% NSR royalty interest on
each of the Moroccan projects. Altus will also obtain an NSR
royalty interest in Eastinco's producing Musasa tantalum project in
Rwanda.
Funding
The Company completed two successful equity fundraisings during
the year, raising a total of GBP27.5 million before expenses. The
first of these, in March 2021, was undertaken to support the
development of the Company's royalty generation assets, principally
in Mali and Egypt. The second, completed in December 2021, provided
funding for the acquisition of the portfolio of royalties from
Newcrest. A number of existing investors participated in the equity
fundraisings, including our cornerstone shareholder La Mancha, and
we also welcomed several new and notable institutional investors to
our register. A number of directors and senior managers also
participated in the fundraisings.
La Mancha further demonstrated its strategic support for the
Company through the provision of a US$29 million strategic
acquisition debt facility to partly fund the acquisition of the
Caserones royalty. This was the Company's first such use of debt
funding and it was fundamental to catalysing our royalty
acquisition strategy.
Market positioning
The Altus portfolio of royalties and projects is weighted
towards gold, with exposure being over 50%. Gold remains the
ultimate liquid "safe-haven" for investors seeking protection from
heightened geopolitical risks and the value-destructive impacts of
inflation on cash and cash-like investments.
The gold price started the year at around $1,900/oz, eased to
around $1,700/oz by early March before recovering to around
$1,800/oz, where it remained for much of 2021. Following the
Russian incursion in Ukraine in early March 2022, gold rose briefly
almost touching $2,100/oz before falling back closer to $1,900/oz.
Our portfolio of cash paying and development stage gold royalties
which Altus acquired from Newcrest in December 2021, provides our
shareholders with direct and relatively low risk exposure to the
current and future strength in the price of gold.
Notwithstanding the concerning situation in Ukraine and its
wider geopolitical and inflationary implications, the world's major
economies continue to promote an agenda to decarbonise the global
economy with a "Net Zero" target. This objective will have
potentially transformational, and perhaps yet to be fully
appreciated, implications for the demand for copper, nickel and
rare earth metals given their fundamental role in the generation,
transmission and consumption of renewable energy. Altus continues
to seek to increase its exposure to these metals and others which
also stand to benefit from a post-Covid-19 recovery in global
growth and infrastructure development. Already, there has been a
sustained surge in the prices of many commodities, as global supply
chains restock and government infrastructure spending increases.
The copper price was on an upward trend at the start of the year,
opening at around US$3.50 per pound ("lb"). It broke through
US$4.00/lb in early February and remained above this threshold for
the rest of 2021, dipping close to US$4.00/lb again in April and
July, but climbing above US$4.70/lb in May and October. It too
soared in early March 2022 to above US$4.90/lb before falling back
slightly. Our ownership of a strategic royalty interest on the
Caserones copper mine in Chile, acquired by Altus for US$34.5
Million in August 2021, provides our shareholders with direct and
relatively low risk exposure to the current and future strength in
the price of copper.
In response to accelerating inflation, central banks around the
world have now started, arguably belatedly, to raise interest rates
with the chairs of central banks guiding that more aggressive
interest rate rises may be required in the months and years ahead.
Should confidence in economic growth fall for whatever reason, in a
period of rising interest rates and excessive (government,
corporate and personal) debt, the potential for a substantial
economic reset will be significant. Gold continues to represent the
ultimate hedge against the potential dramatic consequences of a
systemic debt driven financial crisis, as well as the impacts of
real negative interests, for as long as inflation rates continue to
exceed interest rates.
Outlook
This has been another transformational year for Altus and our
asset portfolio. We have completed two landmark transactions to
acquire cash paying royalties, received our maiden royalty income
from these, expanded our discovery portfolio into the highly
prospective Eastern Desert of Egypt, advanced our the Diba &
Lakanfla gold project in Mali though successful drilling
programmes, structured the divestment and royalty creation on our
Moroccan portfolio of assets and embodied the Company's strategy of
generating growth for shareholders through diversification.
Commodity markets are being pushed higher by the drive to
decarbonise, the post-covid global recovery and by geopolitical
events. The growth of Altus over the past year and the balance of
assets in our portfolio puts us in a strong position to not just
meet the challenges ahead, but to generate superior performance for
our shareholders.
Our key objectives for 2022 are to:
- continue to grow the Company's revenues with the acquisition
of further cash-paying royalties;
- continue to grow and realise value from our royalty generation activities across Africa;
- to conduct business with due regard for the Company's
stakeholders and our environmental as well as social
responsibilities.
Our long-term objective is to realise substantial returns for
shareholders, by generating significant positive cashflow from a
diversified portfolio of high-quality royalty and project
interests. Altus has never had a stronger asset base, team or
outlook and I very much look forward to the year ahead.
In the meantime, I take this opportunity to thank all of the
Altus team for their exceptionally hard work and dedication
throughout what has been an extraordinarily busy year. I also take
this opportunity to thank our new and existing shareholders for
their continued support.
Steven Poulton
Chief Executive Officer
Strategic Report
Key Performance Indicators
The Board uses a mixture of financial and non-financial Key
Performance Indicators ("KPIs") to help monitor the performance of
Altus' group of companies (the "Group"). The following four
categories of KPI's are used to assess the Group's performance:
1. Health, Safety, Environment and Communities (HSEC)
2. Portfolio growth and diversity
3. Financial KPIs
4. Share price performance
1. Health, Safety, Environment and Communities (HSEC)
The health and safety of our employees, contractors and
suppliers is core to how we conduct our business. The Group
promotes a strong culture of health and safety to ensure
individuals take responsibility for doing the right work in the
right way and ensure any breaches of this are recorded. This
culture is supported by comprehensive processes, training and
personal protective equipment to ensure a safe and healthy working
environment. In 2021, the Group achieved a Lost Time Injury
Frequency Rate (LTIFR) of 0 (2020: 0). LTIFR is calculated as
(Number of lost time injuries in the reporting period x 1,000,000 ÷
Total hours worked in the reporting period). The Group's drilling
contractor at the Diba project had one on site incident resulting
in one day of lost time for one of its employees. This is
reportable under the contractor's Health and Safety statistics.
The Group has implemented an Environmental Management Plan in
relation to its active exploration operations in several countries
in Africa. The exploration process involves the short-term
collection of small volumes of physical data from the earth
including soil sampling, channel sampling, trenching and drilling.
The potential impact to the environment from these activities is
relatively minor, but includes very limited emissions to soil,
water and air. Under the Group's Environmental Management Plan,
potential emissions are mitigated in all circumstances in order to
reduce any impacts. The Group has a goal of ensuring no significant
environmental incidents across its operations with none reported in
the year to 31 December 2021 (2020: none).
As part of its exploration operations in several countries in
Africa, the Group ensures its "Social Licence to Operate" by
building and maintaining strong relationships with the communities
in which it operates. Through its programme of community
engagement, the Group ensures effective two-way communication and
resolution of potential issues.
2. Portfolio growth and diversity
The Group has a two-pronged approach to generating royalties,
namely via its acquisition strategy and its discovery strategy. The
KPI relating to the operational performance of each of these
strategies focuses on the management of the existing portfolio of
assets as well as the growth of the portfolio. The Group
continually assesses potential licence applications, projects and
third-party royalty acquisitions in new jurisdictions.
Acquisition Strategy Discovery Strategy
Portfolio management The Group actively The Group's generated
engages with the 3(rd) royalties cover assets
party operators of which are relatively
assets over which earlier stage than
it has acquired royalties. it's acquired royalties.
This includes management Nevertheless, the
calls, production Group maintains proactive
reviews and site visits. engagement with third
In addition, monitoring party operators.
of news flow is undertaken.
----------------------------- ----------------------------
Portfolio growth During the year to During the year to
31 December 2021, 31 December 2021,
the Group acquired the Group generated
a total of 25 existing a total of 15 new
royalties: potential royalties:
1) On 17 August 2021, 1) On 22 November
the Group announced 2021, the Group announced
the US$34.1m acquisition the proposed divestment
of an effective 0.418% of its Moroccan focussed
NSR royalty on the subsidiary in return
Caserones copper mine for 14 royalties generated
in Chile. over the projects
in Morocco as well
2) On 13 December as one royalty over
2021, the Group announced the Musasa tantalum
the US$24.0m acquisition mine in Rwanda.
of a portfolio of
24 gold royalties
from Newcrest Mining
(the second close
for nine of these
royalties took place
in January 2022).
----------------------------- ----------------------------
Portfolio growth Acquired royalties Generated royalties
----------------------------- ----------------------------
31 December 2021 16 8
----------------------------- ----------------------------
31 December 2020 0 9
----------------------------- ----------------------------
The Group's discovery strategy is underpinned by a solid
pipeline of project across a number of commodities and
jurisdictions. In February 2021, the Group was awarded nine gold
exploration licences in Egypt and between March and July 2021, the
Group was awarded ten licences, primarily for copper and silver, in
Morocco.
Number of Projects by 31 December 2021 31 December 2020
Country
Egypt 4 0
Mali 3 4
Morocco 14 4
Cameroon 2 2
Côte d'Ivoire (under
application) 1 1
Ethiopia 2 2
--------------------------- ----------------- -----------------
TOTAL 26 13
--------------------------- ----------------- -----------------
Risk diversification is a key part of the Group's business
model. This is achieved through both geographic diversification as
well as commodity diversification.
Number of Royalties by 31 December 2021 31 December 2020
Country
Australia 14 0
Mali 4 5
Côte d'Ivoire 3 2
Chile 1 0
Cameroon 1 1
Liberia 1 1
------------------------ ----------------- -----------------
TOTAL 24 9
------------------------ ----------------- -----------------
Aside from gold, the Group is focusing on metals that it
believes will be critical in the increasingly decarbonised
electricity industry, particularly copper. The Group also has
interests in nickel, zinc, iron ore, silver and bauxite projects.
The Group's single largest exposure by country and by mineral in
terms of the number of royalties and projects in its portfolio is
as follows.
By Geography By Commodity
----------------------
31 December 2021 Australia and Morocco Gold - 65%
- 29%
31 December 2020 Mali - 32% Gold - 63%
----------------- ---------------------- -------------
3. Financial KPIs
The financial performance of the Group's asset portfolio is
another important KPI and is focused on the management of income
and expenditure associated with the implementation and advancement
of each of these strategies. The Group focuses its expenditure on
its most prospective opportunities for growth, and seeks to reduce
project costs by pursuing potential JV and project sale
transactions across its portfolio. Royalty income in 2021 was
through an associate of the Group and is included under share of
profit of associate in the Statement of Comprehensive Income.
2021 2020
GBP'000 GBP'000
------------------------- --------- --------
Royalty income (pre-tax) 2,641 -
Royalty acquisitions (39,913) -
------------------------- --------- --------
Exploration costs includes geologists, on site costs,
assays/analysis and exploration support costs in Africa, as well as
UK geologists' salaries, and an allocation of UK management time
and UK exploration support costs. There was a significant
acceleration of exploration activity on the Group's projects in
Mali during the year. The UK support team was expanded, and this
increased the proportion of exploration expenditure in overall
costs.
The following is a breakdown of costs included in loss from
operations in the Statement of Comprehensive Income (excluding
foreign exchange losses and share based payments).
Exploration costs Administrative Listing & acquisition
expensed expenses related costs
------------------ ---------------
2021 63% 30% 7%
2020 71% 26% 3%
------ ------------------ --------------- ----------------------
The Group focuses on deploying its cash on activities that are
likely to maximise the value to shareholders while maintaining a
strict control on administrative overheads. The Group's cash on
hand and investments in marketable securities at 31 December (see
table below) are sufficient to fund all projected expenditure for a
minimum of 12 months from the date of this report.
31 December 2021 31 December 2020
GBP'000 GBP'000
Cash and cash equivalents 6,355 5,937
Investments (listed equities) 1,721 1,321
------------------------------- ----------------- -----------------
Total 8,076 7,258
------------------------------- ----------------- -----------------
4. Share price performance
The Company's share price performance broadly reflects the
market appetite for the equity of resource companies and
specifically for the Group's asset portfolio and growth prospects.
In addition to providing returns to shareholders, a higher market
valuation reduces the cost of capital for existing shareholders by
reducing the amount of dilution when raising new capital through
the issuance of equity. The remuneration of certain directors,
management and other employees is part settled through the award of
share options, further aligning the interests of shareholders and
the Company's employees.
Principal Risks and Uncertainties
Risk description and impact Risk management strategy
The Group's projects may not Risk is diversified by holding
contain economically recoverable a portfolio of projects. At
volumes of minerals or metals, every stage of the exploration
due to insufficient quality process, projects are rigorously
or quantity. Delays in the construction reviewed, either internally
and commissioning of mining or by qualified third-party
projects or other technical consultants, to determine if
difficulties may make the deposits the results justify the next
uneconomic to exploit. stage of exploration expenditure.
------------------------------------------
Exploration activities, particularly The Group aims to comply with
more advanced activities such provisions of PDAC's 'E3+' guidance
as drilling, carry a risk of on responsible exploration as
local environmental damage or applicable. It maintains its
other issues, such as fuel spills, own Environmental Management
contamination of water courses, Plan, which is regularly reviewed,
dust creation and damage to and publicised to site-based
agricultural land or wild flora employees. This contains a set
and fauna. of actions for each project
based on a policy of Avoid,
Mitigate, Remedy.
------------------------------------------
Exposure to Covid-19 could pose All public health advice is
a serious threat to the health immediately put into practice
of the Group's employees. Long-term and local restrictions are strictly
working from home could adversely adhered to. The isolation of
impact the mental health of working from home is mitigated
employees. by regular video calls involving
all team members.
------------------------------------------
Exploration activity exposes The Group keeps the wellbeing
the Group's employees to additional of its employees as the highest
health and safety risks, such of its priorities. As part of
as travel to and from remote a risk-based approach, FCO travel
sites, use of equipment, and advice is followed at all times,
exposure to extreme weather and regular first aid and other
or other environmental hazards. operational training is provided.
Employees must also be up to
date with all recommended vaccinations.
------------------------------------------
An extended period of restrictions Due to the portfolio nature
on movement could disrupt exploration of the Group's business, some
activity on the Group's projects. projects are at a stage of development
that requires office-based work
such as remote sensing and historical
data analysis. At times of restricted
movement employees can be allocated
to such projects to maintain
momentum on the development
of the portfolio and to minimise
redundancy or underemployment.
The Group's Africa-based staff
has been able to continue on-site
operations as local restrictions
permitted.
------------------------------------------
A reduction in global demand Altus has adopted a counter-cyclical
for gold, copper or other metals business model which seeks to
could lead to a significant grow fastest during economic
fall in the value of the Group's downturns. It has structured
exploration assets as well as itself as a Company that can
the cash flow from royalties run extremely lean operations
and any production, or even to undertake early-stage exploration,
result in the abandonment of and works with funded JV partners
a project should it prove uneconomical for the advanced stages of exploration.
to develop. Similarly, commodity
prices could fall in reaction The Company diversifies its
to changes in international cash-paying royalty portfolio,
economic trends, impacting the holding assets principally in
revenue generated by royalties tier-1 jurisdictions, with high
and projects in which the Group coverage levels for its debt
holds an interest. This may facility.
have a material adverse impact
on the operating results and
financial condition of the Group.
------------------------------------------
The successful exploration and The Group enters JV partnerships
development of natural resources with established exploration,
on any project will require development and mining companies
significant capital investment. who fund exploration activity
The Group may not be successful in return for an equity share
in procuring the requisite funds in the exploration assets. The
on terms which are acceptable Group takes a disciplined and
to it (or at all) and, if such objective approach to its portfolio
funding is unavailable, the and maintains a high quality
Group may be required to reduce range of assets that is attractive
its level of exploration activity to investors by relinquishing
and divest or relinquish its licences that it does not believe
assets. offer good prospects. This strategy
is evidenced by a number of
leading natural resources sector
investors on the Company's share
register.
------------------------------------------
The exploration licences and The Group makes every effort
operations of the Group are to ensure it has robust commercial
in jurisdictions outside the agreements covering its activities.
United Kingdom, which subjects It maintains comprehensive documentation
the Group to political risk. covering its licence assets
Adverse impacts could include and the Board and management
the withdrawal or suspension oversee the good standing of
of licences, and cancellation these assets. The Group's Africa-based
or onerous changes to permits staff maintains a continual
or regulatory consents. dialogue with local government
agencies.
------------------------------------------
The Group is dependent upon The Remuneration & Nominations
a small executive team and other Committee reviews the Company's
key personnel. The loss of these compensation package annually
employees or the inability to to ensure that it remains competitive
attract additional qualified (see Directors' remuneration
personnel as the Group grows report, pages 63-67). The Company
restricts the ability of the maintains strong links with
Group to manage an expanded industry bodies and training
portfolio of projects. establishments to ensure access
to a wide pool of talent. The
management team was expanded
during the year to eight members.
------------------------------------------
As a UK-based junior mining Since 2017, Altus has listed
project and royalty generator, on both the AIM in the UK and
Altus could struggle to attract since 2018 also on the TSX-V
JV partners to advance its projects in Canada, building a shareholder
to mine-readiness, and to create base and an industry reputation.
a long-term revenue stream. During 2020 the Company's shares
also commenced trading on the
OTCQX market in the United States.
Potential partners are engaged
in these markets and elsewhere,
including the ASX market in
Australia. Altus actively markets
its portfolio through news releases
and its website, and networks
with investors and partners
at conferences and industry
events.
------------------------------------------
Financial risks
Material financial risks are
listed below.
Financial risks are also discussed
in note 29.
------------------------------------------
Income from the Group's cash-producing The Group holds a diverse portfolio
royalties may vary depending of cash-producing royalties
on commodity prices and the across several different mines,
operational performance of the countries and commodities. This
mine and its operator. diversification is part of its
business model and seeks to
protect revenues.
------------------------------------------
It will take some time for the The Group aims to maximise the
Company's discovery projects opportunities for converting
to develop into operational projects into revenue-generating
mines with revenue streams able assets by advancing the exploration
to positively impact Altus' of its licences and actively
cashflow. Until then, the Group marketing them to potential
will be reliant on funding from partners, whilst at the same
shareholders to continue its time maintaining a disciplined
discovery programme insofar attitude to expenditure and
as this is not covered by the preserving its cash. The Group
net income from cash paying also seeks JVs on its projects
royalties and dividends from with third parties, which can
associates less payments on reduce the Group's reliance
borrowings. on shareholder funding.
------------------------------------------
The Company's loan liability Altus has received a number
to La Mancha is repayable by of proposals to re-finance the
30 June 2022 and a re-financing loan before 30 June 2022.
has not yet been put in place.
Were the Company unable to secure
a re-financing of the loan,
it could potentially impact
the Company's ability to maintain
its current business operations.
------------------------------------------
The Group's shareholder financing When funds are received a cashflow
is denominated in pounds sterling forecast is prepared by currency
and Canadian dollars. Its royalty to identify the anticipated
income is in US dollars and currency transactions that will
Australian dollars. Its exploration be required over the period
expenditure is incurred in US that the funds are expected
dollars and a range of African to be used. FX transactions
currencies. are undertaken at the earliest
opportunity to minimise currency
risk.
------------------------------------------
Corporate and Social Responsibility
The Board of Directors of Altus is committed to the
consideration of all stakeholders in its decision-making process
and to the respectful treatment of stakeholders in the conduct of
the Group's business. In addition, the Directors are conscious of
the obligations imposed by section 172 of the Companies Act 2006
(England & Wales), their response to which is set out in the
following paragraphs.
Sustainability and environmental protection
Altus is committed to conducting its business operations in a
sustainable manner and strives continuously to limit the impact of
its activities on the natural environment and on the local
communities in the regions where it has operations. The business of
Altus involves the acquisition and generation of royalties on
producing mines as well as exploration activities on potential
mining projects, and does not involve mining itself. Therefore, the
environmental impact directly associated with its activities is
limited. However, the Company is keenly aware that good
environmental stewardship of its projects is fundamental to its
operations, and the Company endeavours to ensure that all areas it
explores are properly maintained, and conserved, and rehabilitated
once operations are completed.
A central tenet of the Group's policy is the Environmental
Management Plan ("EMP"), which guides the Group's on-site
activities from the planning stage through on-site operation to the
return of sites to local communities once the Group's activity has
finished.
Many of the areas of operation are regions of subsistence
farming, and Altus and its employees are conscious that the impact
of operations may not be limited to nuisance or upset, but could
have a serious impact on the livelihoods of local people. As a
result, the Group operates a number of policies to prevent problems
and to remediate those that cannot be avoided. Where arable or
grazing land is affected, rates of compensation are agreed with the
local authorities before any invasive activity begins. Meetings are
held with local stakeholder groups to explain the project, to
listen to local concerns and to mitigate any potential problems. At
the other end of the project cycle, once activities have ceased,
the Group arranges for replanting of crops or the promotion of
flora re-growth, and returns to monitor progress after six
months.
At the Diba gold project in western Mali, the Group applied its
EMP to the drilling programmes undertaken during 2021. At Diba NW,
the Group delayed commencing its drilling programme until after the
harvest had been collected, and the team was given a radius of
operations for each drill pad to give scope to avoid cutting down
trees. Avoidance of damage is always the preferable option, but at
Diba, where for approximately a quarter of the drill-pad movements
it was not possible to avoid affecting farming land, compensation
was paid to farmers at rates agreed with the local community before
the programme commenced. Post-drilling, sites were inspected to
ensure all waste material had been removed, diamond drilling sumps
had been filled and ground had been levelled and raked.
The Board and management consider the potential ESG impact of
its discovery business to be relatively low. This is based on the
minimal footprint of these operations, particularly in terms of the
limited scope and duration of the Company's own field activities.
Nevertheless, the Group's portfolio of royalties includes royalties
on mines which are already in development or production. These
operations have the potential for a more significant environmental
and social impression. As such, the Company ensures a programme of
acquisition due diligence as well as ongoing monitoring and
assessment of these assets. The Group acquired its first
cash-paying royalty, which is located in Chile, in August 2021 and
a further two cash-paying royalties (each located in Australia) in
December 2021. In conducting its due diligence on these projects,
the Group assessed the available information on aspects of ESG
processes and management.
The Group is putting into practice a programme for the effective
management of its ESG responsibilities with respect to assets it
does not itself control. This will include engagement with mining
operators for the purpose of sharing policies, and identifying and
encouraging best practice. The Company will seek to have an
effective positive influence wherever possible. It will be the
specified responsibility of a team within the Company to monitor
third-party operators from an ESG perspective, and to obtain a
comprehensive and, where possible, independent picture in order to
form a fair opinion. On an ongoing basis, the Company will assess
the effectiveness of its portfolio of third-party royalty assets
through an ESG lens and not just in terms of financial
performance.
Community engagement
Altus is mindful that it has the capacity to have a positive
impact in its areas of operation, many of which are remote and
offer little alternative opportunity to local people. It employs a
range of local people from trained geologists to administrative
support and drivers. At the end of 2021, it employed 30 people in
five African countries (2020: 16 people in four countries). To some
of the local people in the more rural sites, Altus offers the
opportunity to be involved in the exploration activity and to gain
transferable skills, such as operating geotechnical equipment.
Before the declaration of force majeure, Altus also assisted
students of geology from the University at Mekele in Ethiopia to
visit its exploration sites.
In August 2021, Altus completed the first phase of a community
development programme ("CDP") at the Diba gold project in western
Mali. Altus undertook a consultation process with representatives
of the local communities close to Diba in order to prioritise
programmes that would have the greatest positive impact. Following
this consultation, the specialist environmental company, EBEF-Mali,
was commissioned to install a low-maintenance system to provide
safe drinking water on tap to the school and nearby village of
Koropoto, which is located 2km to the east of the project, outside
of the current Diba licence area. The project involved drilling a
72.5m borehole, construction of a 12m high water tank with a
solar-powered water pump and installation of all other necessary
infrastructure. The CDP will prioritise other health as well as
education projects, and in time will be extended to other
communities in the surrounding area.
Anti-corruption and bribery
It is the Group's policy to conduct its business in an honest
and ethical manner. The Group takes a zero-tolerance approach to
bribery and corruption and is committed to acting professionally,
fairly and with integrity in all business dealings and
relationships in our countries of operation. As part of this, it
aims to implement and enforce effective systems to counter
potential bribery and corruption.
The Group will uphold all laws relevant to countering bribery
and corruption in the jurisdictions in which we operate. We also
remain bound by UK laws, including the Bribery Act 2010, in respect
of our conduct both in the UK and abroad. The Group's policy on
Anti-corruption and bribery is available via the Company's website
and forms an important part of the appointment of all new
employees, contractors and suppliers.
Human rights
Altus is committed to best practice in socially and morally
responsible exploration and in the development of mineral resources
for the benefit of all stakeholders. The activities of the Group
are undertaken in line with applicable laws on human rights.
Health & Safety
Altus takes the health and wellbeing of its employees,
contractors and suppliers extremely seriously and works
continuously to minimise the potential hazards encountered. A
comprehensive health and safety programme is maintained
incorporating official guidelines, industry best practice, lessons
from previous incidents and employee suggestions.
There have been no road traffic accidents affecting the Group
during the last three years of operation, although there was one in
each of the two preceding years, both involving third party drivers
and vehicles. While Altus could not have prevented these accidents,
they reiterated the importance of high safety standards. Altus
continues to review all of its standards regularly and to ensure
its suppliers and service providers adhere to these at all
times.
Employees
Altus fully appreciates that its team is central to its future
development and success. The aim of the Group is to create an
environment that will attract and retain staff, and motivate
employees to maximise their potential. The Company provides a fair
remuneration package, and gives due consideration to requests for
flexible working arrangements. It aims to give employees exposure
to wider aspects of the Company's operations. The Group promotes a
culture of openness among its employees and welcomes their input
into the good running of its operations.
In line with its commitment towards a gender balance in its
workforce, Altus has engaged with the Women in Mining ("WIM")
group, both in the UK and internationally. Annually, the Group
offers at least one internship through WIM. At the end of 2021, the
following numbers were represented on the Company's team (includes
employees and contractors).
Women Percentage
------
Board - 0%
Management team 2 25%
Geologists/technical 2 9%
Administration/support 5 31%
------------------------ ------ -----------
Total 9 18%
------------------------ ------ -----------
Altus has a long track record in recruiting and training
promising geologists. Each year the Group typically offers at least
one MSc level project thesis to students of geology or mining
geology in the UK. The Group is also proud to provide internships
for recent graduates, allowing them to gain flexible work
experience and if available the opportunity for a full-time role
with the Group.
The Group welcomes diversity within its workforce and does not
discriminate against its employees, workers or job applicants on
the grounds of age, gender, ethnicity, disability, nationality,
race, sexual orientation or religious belief.
Financial Review
Income
Due to the holding structure of the Group's royalty assets,
income from royalties received in 2021 was recognised in the
Statement of Comprehensive Income under share of profit of
associates which is detailed in note 21. The share of profit of
associates was GBP985,000 for the year (2020: GBPnil) and related
solely to the royalty on the Caserones copper mine in northern
Chile. The associate in question is SLM California, registered in
Chile, in which Altus holds a 21.5% interest through its joint
operation with EMX. The profit figure includes the royalty from the
mine, amortisation of the royalty asset based on quarterly
production figures, minimal local expenses and a provision for
Chilean income tax. The profit relates to royalties declared in Q3
and Q4 of 2021 in respect of production in the preceding
quarters.
Revenue and costs recovered from JV partners decreased to
GBP318,000 (2020: GBP361,000) as a result of the JV with Marvel
Gold covering the Lakanfla and Tabakorole projects in western and
southern Mali progressing during the year to a stage where the
Company no longer charges management fees or incurs rechargeable
costs.
Expenses
Exploration costs expensed in the Statement of Comprehensive
Income increased to GBP3,206,000 (2020: GBP2,350,000). This was
driven to a large extent by costs associated with the drilling
programmes on the Company's Diba gold project in western Mali.
Although drilling costs themselves were lower at GBP725,000 (2020:
GBP891,000), costs of associated assays increased from GBP49,000 to
GBP297,000 and other on-site operational costs, principally at Diba
but to a lesser extent also on the Company's four new projects in
Egypt, resulted in an increase from GBP95,000 to GBP313,000. The
split between exploration costs recovered from JV partners and
those borne by the Company is shown in note 7 to the financial
statements.
Expenditure relating to projects in Mali was GBP1,876,000 which
accounted for 59% of total exploration costs (2020: GBP1,497,000
and 64%). The Company commenced the establishment of operations in
Egypt in the spring of 2021, opening an office in Cairo in
September, and sending its first geologists to site in the fourth
quarter. Exploration expenditure in Egypt was GBP425,000 in the
year, which represented 13% of the Company's total (2020: GBP8,000
which was <1%). The principal areas of expenditure were local
and UK salaries (GBP222,000), on-site operations (GBP60,000),
travel (GBP57,000) and business support costs (GBP55,000).
Expenditure in Morocco increased to GBP429,000 (2020: GBP268,000)
in the areas of technical consultants and travel, resulting from a
high-resolution IP survey at the Agdz project. Exploration
expenditure in the Company's other countries of operation reduced;
in Cameroon it was GBP290,000 (2020: GBP319,000) due to a reduction
in the number of assays analysed, in Ethiopia it was GBP177,000
(2020: GBP202,000) where operations were suspended under force
majeure for the whole of 2021, and in Côte d'Ivoire to GBP6,000
(2020: GBP58,000) following the sale of the Company's Prikro gold
project in November 2020.
Staff costs for UK-based geologists and the corporate team
increased to GBP1,328,000 (2020: GBP997,000), which took staff
costs for the Group to GBP1,873,000 (2020: GBP1,210,000). A key
element of the increase was the new team in Egypt, which by the end
of 2021 included a General Manager, five geologists and a logistics
and administration support team in Cairo. Another element was the
continued development of the team in the UK, which included the
appointment of a full-time Company Secretary and Legal Counsel, and
full-year salaries for those people hired in the course of 2020.
The Company furloughed two members of technical staff for a short
period in 2020, and there were no redundancies as a result of the
pandemic. Staff costs including share-based payments increased to
GBP2,851,000 (2020: GBP1,814,000) mainly resulting from the full
year, fair value charge for share options granted in August
2020.
Administrative expenses in the Statement of Comprehensive Income
increased to GBP1,789,000 (2020: GBP849,000), and excluding
impairment charges on intangible assets were GBP1,219,000 (2020:
GBP828,000). This included the increase in staff costs as well as
costs of a second broker to the Company in the UK, the use of
advisors to make improvements in shareholder communications and
higher insurance premiums. There was a renewed attendance at
industry conferences and events as travel restrictions were lifted,
and additional premises costs for the Company's new office in
Cairo. There was a reduction in external legal costs as work was
brought in-house.
Listing and acquisition related costs for the year increased to
GBP443,000 (2020: GBP88,000), which included in-house and external
legal fees, tax advice and stamp duty for the royalty acquisitions
in Chile, Côte d'Ivoire and Australia.
Other income and costs
Other operating costs increased to GBP1,255,000 (2020:
GBP993,000) and included a share based payment charge of GBP982,000
(2020: GBP664,000) resulting from the valuation of share options
granted to Directors and employees in August 2020 and August 2021,
and a foreign exchange loss of GBP273,000 (2020: GBP329,000) which
was mainly an accounting translation of cash balances into the
functional currency rather than a realised loss.
Other income reduced to GBP227,000 (2020: GBP1,939,000) which
was principally made up of the accrued UK Research &
Development ("R&D") tax credit for the 2020 tax year that was
filed at the end of 2021 and received in January 2022. The Group
recorded a gain on revaluation of its three external investment
holdings during the year of GBP45,000 (2020: GBP162,000 loss).
Assets and cash
The net assets of the Group increased to GBP31,862,000 (2020:
GBP10,301,000) which was reflected in the creation of a new line in
the Company's balance sheet valued at GBP25,367,000 for investments
in associates, a higher value of investments in external
investments of GBP1,721,000 (2020: GBP1,321,000) and higher
intangible assets of GBP16,994,000 (2020: GBP3,277,000), offset by
the addition of borrowings of GBP18,349,000 (2020: GBPnil).
Investments in associates comprises the Group's interests in two
companies, SLM California in Chile and Legend Gold Mali SARL in
Mali. SLM California is the entity holding the Caserones royalty in
which Altus acquired a 21.5% interest in August 2021 for US$34.1
million. Legend Gold Mali SARL is the entity holding the Lakanfla
and Tabakorole exploration licences interests which were the
subject of a JV with Marvel Gold throughout 2021. Under the terms
of the JV, the Group's interest in the entity reduced to 49% upon
completion of a certain project stage, from which point the entity
was derecognised as a subsidiary and recognised as an associate.
Following the end of the period the Lakanfla licence was removed
from the JV with Marvel Gold and the Company's interest in the UK
incorporate JV holding company was reduced to 30%.
The increase in the balance of external investments was due to
the receipt of a final tranche of 10 million shares of ASX-listed
Canyon arising from the termination of the JV agreement in
2019.
The increase in the balance of intangible assets was due to the
acquisition of the portfolio of royalty assets from Newcrest, the
first close of which took place in December 2021 for a value of
US$20.0 million. This included the Ballarat and SKO royalties in
Australia and the Bonikro royalty in Côte d'Ivoire, as well as
royalties on 12 development and exploration stage assets in
Australia. The increase was offset by the full impairment of the
Pitiangoma Est licence in southern Mali which was relinquished
during the year, and due to the Lakanfla and Tabakorole projects
ceasing to be recognised as intangible assets, instead being
recognised as part of the investment in associate, Legend Gold, as
detailed above. The Caserones royalty is accounted for as an
intangible asset of its associate company, SLM California, and
appears in the balance sheet under investment in associate rather
than intangible assets.
The addition of a line in the balance sheet for borrowings
represents the receipt of the US$29.0 million loan to the Group by
La Mancha, which was used to partly fund the Caserones royalty
acquisition. Of the balance of the facility drawn down, US$5.0
million was repaid during the year.
The Group's cash balance at the end of the year was GBP6,355,000
(2020: GBP5,937,000). Operating cash outflow increased to
GBP3,245,000 (2020: GBP2,348,000) comprising an adjusted loss
figure of GBP3,834,000 and positive movements in working capital of
GBP589,000. Investing cash outflow was GBP40,315,000 (2020:
GBP104,000) primarily for the acquisition of the Caserones royalty
and Newcrest royalty portfolio, and also including GBP614,000 for
interest on the loan provided by La Mancha. Financing cash inflow
was GBP43,978,000 arising from the two equity fundraises, in March
and December 2021, and the loan from La Mancha.
Fundraising
During the year, the Company raised a total GBP27.5 million
(C$47.1 million) in two equity fundraisings. In March 2021, the
Company raised GBP7.7 million (C$13.4 million) through a placement
of 10,266,668 Ordinary Shares of the Company at a price of GBP0.75
(C$1.30) per share with existing and new institutional and private
investors. La Mancha and certain directors and employees of the
Group participated in the placement. The fundraising was led by
joint brokers in the UK, SP Angel and Shard. The issue price of the
new Ordinary Shares represented a discount of approximately 8.0% to
the closing mid-market price of GBP0.815 / C$1.41 on 19 March
2021.
In December 2021, the Company raised GBP19.8 million (C$33.7
million) before expenses through a placement of 36,930,143 Ordinary
Shares of the Company at a price of GBP0.535 (C$0.90) per share
with existing and new institutional and private investors. La
Mancha and certain directors and employees of the Group
participated in the placement. BMO Capital Markets Limited acted as
Sole Bookrunner with SP Angel and Shard acting as Lead Managers and
Sprott Global Resource Investments Ltd acted as a finder in respect
of some of the subscription shares. The issue price of the new
Ordinary Shares represented a discount of approximately 7.0% to the
closing mid-market price of GBP0.575 / C$1.01 on 14 December
2021.
Going concern
The Directors have assessed the cash resources available to the
Company, including balances of cash and investments held in
publicly traded companies at the reporting date. They have reviewed
a detailed 24-month budget prepared by the Company, assessing the
likelihood of receiving projected royalty and other income, debt
coverage and the breakdown between committed and discretionary
projected expenditure. Given the Company's previous statement of
the low impact of Covid-19 on operations in the short-to-medium
term, a renewed outbreak of Covid-19 has not been included in the
analysis. Based on their assessment, the Directors anticipate that
net income from the current portfolio of royalties is unlikely to
be sufficient to cover exploration and other costs of the business
over the next 12 months and that in that period the Company may
have to raise additional funding. In making their assessment, the
Directors acknowledged the existence of a number of material
uncertainties including volatility in financial and commodity
markets, and political and security risks. These and other risks
faced by the Company are outlined in detail in the Strategic Report
on pages 21 to 23.
The Company's loan liability to La Mancha, the balance of which
was GBP18.3 million at 31 December 2021, is repayable by 30 June
2022. As at the date of this report, a re-financing of the loan has
not been put in place. The Directors note that, were the Company
unable to secure a re-financing of the loan, it could potentially
impact the Company's ability to maintain its current business
operations, and acknowledge that this constitutes a material
uncertainty. However, the Directors also note that Altus has
received a number of proposals to re-finance the loan before 30
June 2022, and they remain confident that the necessary funding
will be secured.
Based on their assessment, the Directors have, at the time of
approving the financial statements, a reasonable expectation that
the Group will have adequate resources to continue in operational
existence for the foreseeable future. Therefore, the Directors
continue to adopt the going concern basis of accounting in
preparing the financial statements.
Independent Auditor's Report to the Members of Altus Strategies
plc
Opinion
We have audited the financial statements of Altus Strategies plc
(the 'parent company') and its subsidiaries (the 'group') for the
year ended 31 December 2021 which comprise the Group Statement of
Comprehensive Income, the Group and Company Statement of Financial
Position, the Group and Company Statement of Changes in Equity, the
Group and Company Statement of Cash Flows and notes to the
financial statements, including significant accounting policies.
The financial reporting framework that has been applied in their
preparation is applicable law and UK-adopted international
accounting standards and as regards the parent company financial
statements, as applied in accordance with the provisions of the
Companies Act 2006.
In our opinion:
-- the financial statements give a true and fair view of the
state of the group's and of the parent company's affairs as at 31
December 2021 and of the group's loss for the year then ended;
-- the group financial statements have been properly prepared in
accordance with UK-adopted international accounting standards;
-- the parent company financial statements have been properly
prepared in accordance with UK-adopted international accounting
standards and as applied in accordance with the provisions of the
Companies Act 2006; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
Separate opinion in relation to IFRSs as issued by the IASB
As explained in note 1 to the group financial statements, the
group, in addition to complying with its legal obligation to apply
UK-adopted international accounting standards, has also applied
IFRSs as issued by the International Accounting Standards Board
(IASB).
In our opinion the group financial statements give a true and
fair view of the consolidated financial position of the group as at
31 December 2021 and of its consolidated financial performance and
its cash flows for the year then ended in accordance with IFRSs as
issued by the IASB.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the group
and parent company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK,
including the FRC's Ethical Standard as applied to listed entities,
and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Material uncertainty related to going concern
We draw attention to note 1 in the financial statements, which
indicates that the Group is reliant on additional raising of
capital or financing to refinance the existing debt facility in the
going concern period. As stated in note 1, these events or
conditions indicate that a material uncertainty exists that may
cast significant doubt on the Company's ability to continue as a
going concern. Our opinion is not modified in respect of this
matter.
In auditing the financial statements, we have concluded that the
director's use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our
evaluation of the directors' assessment of the company's ability to
continue to adopt the going concern basis of accounting included
reviewing the group's existing financing arrangements, the ongoing
refinancing, forecasts and assumptions used in their preparation.
Our work included comparing these forecasts to actual results and
significant events subsequent to the year end.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
Our application of materiality
The scope of our audit was influenced by our application of
materiality. The quantitative and qualitative thresholds for
materiality determine the scope of our audit and the nature, timing
and extent of our audit procedures. The materiality applied to the
group financial statements was GBP275,000 (2020: GBP200,000), based
on thresholds for net assets and the loss before tax. The
benchmarks used and the percentages applied are unchanged from the
prior period and were selected as the intangible assets and
exploration costs are the primary drivers of the business. The
performance materiality was GBP192,500 (2020: GBP140,000) and
triviality of GBP13,750 (2020: GBP10,000). The materiality applied
to the parent company financial statements was GBP80,000 (2020:
GBP30,000) based upon the loss before tax. The performance
materiality for the parent company was GBP56,000 (2020:
GBP21,000).
Component materiality for all entities within the group was set
lower than our overall group materiality and ranged from GBP1,000
to GBP75,000 with a performance materiality set at 70% of overall
materiality.
We agreed with the audit committee that we would report all
audit differences identified during the course of our audit in
excess of GBP13,750 at group level, as well as differences below
that threshold that, in our view, warranted reporting on
qualitative grounds.
Our approach to the audit
Our audit is risk based and is designed to focus our efforts on
the areas at greatest risk of material misstatement, aspects
subject to significant management judgement as well as greatest
complexity, risk and size.
As part of designing our audit, we determined materiality and
assessed the risk of material misstatement in the financial
statements. In particular, we looked at areas involving significant
accounting estimates and judgement by the directors and considered
future events that are inherently uncertain. The recoverability of
intangible assets and investments in subsidiary undertakings were
assessed as areas which involved significant judgements by
management. We also addressed the risk of management override of
internal controls, including among other matters consideration of
whether there was evidence of bias that represented a risk of
material misstatement due to fraud.
The accounting records of the parent company and all subsidiary
undertakings are centrally located and audited by us based upon
group materiality or risk to the group. The key audit matters and
how these were addressed are outlined below.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current year and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect
on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
Key Audit Matter How the scope of our audit responded
to the key audit matter
Valuation and recoverability We reviewed the group's exploration
of exploration assets and, licences and permits to confirm
for the parent company, good title and standing. For licences
amounts due from subsidiary which had expired and are in the
and related undertakings process of renewal, we assessed
(refer notes 17,19, and the relevant factors, in conjunction
21). with discussions with management,
The carrying value of intangible regarding the likelihood of renewal.
assets as at 31 December We reviewed the terms and status
2021 is GBP16,993,769 (2020: of the joint venture agreements
GBP3,277,381) which comprises in place, in conjunction with the
royalty assets acquired accounting treatment adopted under
during the year and costs the terms of those agreements.
associated with exploration The early stage projects were reviewed
licenses and projects in for indicators of impairment in
Africa. The royalty assets accordance with IFRS 6. We discussed
are considered in more detail with management the scope of their
in a separate Key Audit future budgeted and planned expenditure
matter below. on the licence area.
The carrying value of investments The recoverability of amounts due
in subsidiaries, together from subsidiary and related undertakings
with intra-group receivables were assessed by reference to the
was GBP56,856194 (2020: underlying exploration projects.
GBP14,912,031) as at 31 Management's impairment assessments
December 2021. were reviewed for reasonableness.
Management is required to We reviewed the terms of the agreement
assess annually whether leading to the loss of control and
there is any indication deconsolidation of the assets in
that the group's intangible Legend Mali sarl. We reviewed the
assets are impaired, and accounting entries and ensured they
consider whether the carrying were in line with IFRS 10.
value exceeds the expected We considered any other information
recoverable amount. The obtained during the course of our
carrying value of investments work, including applicable subsequent
in subsidiaries, including events, to assess whether there
intra group receivables, were any potential indicators of
is directly linked to the impairment not identified by management.
underlying exploration assets.
Evaluating the recoverable
amount, particularly for
early stage royalty and
exploration projects, requires
significant estimation and
judgement. This makes this
area a key focus for the
audit.
Accounting treatment and Caserones
valuation of acquired royalty We reviewed the acquisition agreements
interests during the period and corporate structure of the proposed
(refer notes 17 and 20) royalty assets. We reviewed management's
During the year, the group assessment of the accounting treatment
entered into an agreement of the proposed structure and agreed
to acquire an effective that the entity holding the royalty
0.418% net smelter return should be accounted for as an investment
("NSR") royalty interest in associate under IFRS 11 and IAS
on the producing Caserones 28. We reviewed the good title to
Copper Mine of northern the assets shown.
Chile. The accounting treatment and entries
In December 2021, the group made upon acquisition were reviewed
also completed the first with reference to the royalty sale
stage of completion on the and purchase agreement and the consideration
acquisition of a portfolio was substantively tested.
of 24 royalty projects for We reviewed the equity accounting
US$24m. and recognition of the share of
There is a risk that the profit of the associate with reference
acquisitions have not been to the royalties received and dividends
correctly accounted for paid.
or valued in accordance We reviewed management's assessment
with the financial reporting of the carrying value of the assets
framework. and indicators of impairment.
Newcrest royalties
We reviewed the acquisition agreements
and corporate structure of the proposed
royalty assets. We reviewed management's
assessment of the accounting treatment
of the proposed structure and agreed
that the arrangement constituted
a jointly controlled operation under
IFRS 11 and as a result is accounted
for under the proportionate consolidation
method. We reviewed the good title
to the assets shown.
The accounting treatment and entries
made upon acquisition were reviewed
with reference to the royalty sale
and purchase agreement and the consideration
transferred was substantively tested.
We reviewed management's assessment
of the carrying value of the assets
and indicators of impairment.
==============================================
Other information
The other information comprises the information included in the
annual report, other than the financial statements and our
auditor's report thereon. The directors are responsible for the
other information contained within the annual report. Our opinion
on the group and parent company financial statements does not cover
the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of
assurance conclusion thereon. Our responsibility is to read the
other information and, in doing so, consider whether the other
information is materially inconsistent with the financial
statements or our knowledge obtained in the course of the audit, or
otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are
required to determine whether this gives rise to a material
misstatement in the financial statements themselves. If, based on
the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report
that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act
2006
In our opinion, based on the work undertaken in the course of
the audit:
-- the information given in the strategic report and the
directors' report for the financial year for which the financial
statements are prepared is consistent with the financial
statements; and
-- the strategic report and the directors' report have been
prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and
the parent company and their environment obtained in the course of
the audit, we have not identified material misstatements in the
strategic report or the directors' report.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
-- adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the parent company financial statements are not in agreement
with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the Statement of Directors'
Responsibilities, the directors are responsible for the preparation
of the group and parent company financial statements and for being
satisfied that they give a true and fair view, and for such
internal control as the directors determine is necessary to enable
the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the group and parent company financial statements,
the directors are responsible for assessing the group and the
parent company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors
either intend to liquidate the group or the parent company or to
cease operations, or have no realistic alternative but to do
so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below:
-- We obtained an understanding of the group and parent company
and the sector in which they operate to identify laws and
regulations that could reasonably be expected to have a direct
effect on the financial statements. We obtained our understanding
in this regard through discussion with management, our expertise in
the sector and through the application of cumulative audit
knowledge.
-- We determined the principal laws and regulations relevant to
the group and parent company in this regard to be those arising
from the Companies Act 2006, IFRS accounting standards, and the
operating terms set out in the exploration licenses, as well as
local laws and regulations.
-- We designed our audit procedures to ensure the audit team
considered whether there were any indications of non-compliance by
the group and parent company with those laws and regulations. These
procedures included, but were not limited to:
o enquiries of management; and
o review of minutes and other correspondence.
-- We also identified the risks of material misstatement of the
financial statements due to fraud at both the group and parent
company level. We considered, in addition to the non-rebuttable
presumption of a risk of fraud arising from management override of
controls, whether key management judgements could include
management bias was identified in relation to the carrying value of
the exploration assets and we addressed this as outlined in the Key
Audit Matters section.
-- As in all of our audits, we addressed the risk of fraud
arising from management override of controls by performing audit
procedures which included, but were not limited to: the testing of
journals; reviewing accounting estimates for evidence of bias; and
evaluating the business rationale of any significant transactions
that are unusual or outside the normal course of business.
-- Compliance with laws and regulations at the subsidiary level
was ensured through enquiry of management and review of ledgers and
correspondence for any instances of non-compliance.
Because of the inherent limitations of an audit, there is a risk
that we will not detect all irregularities, including those leading
to a material misstatement in the financial statements or
non-compliance with regulation. This risk increases the more that
compliance with a law or regulation is removed from the events and
transactions reflected in the financial statements, as we will be
less likely to become aware of instances of non-compliance. The
risk is also greater regarding irregularities occurring due to
fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at:
http://www.frc.org.uk/auditorsresponsibilities . This description
forms part of our auditor's report.
Use of our report
This report is made solely to the company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone, other than the company and the company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
David Thompson (Senior Statutory Auditor)
For and on behalf of PKF Littlejohn LLP
Statutory Auditor
15 Westferry Circus
Canary Wharf
London
E14 4HD
Independent Auditor's Report to the Members of Altus Strategies
plc in Respect of Canadian National Instrument 52-107
Opinion
We have audited the group financial statements of Altus
Strategies plc and its subsidiaries (the "group") for the year
ended 31 December 2021 which comprise the Group Statement of
Comprehensive Income, the Group Statement of Financial Position,
the Group Statement of Changes in Equity, the Group Statement of
Cash Flows and notes to the financial statements, including a
summary of significant accounting policies. The financial reporting
framework that has been applied in their preparation is applicable
law and International Financial Reporting Standards (IFRSs) as
issued by the International Accounting Standards Board
("IASB").
In our opinion:
-- the group financial statements present fairly, in all
material respects, the financial position of the group as at 31
December 2021 and 31 December 2020 and its financial performance
and its cash flows for the years then ended; and
-- the group financial statements have been properly prepared in
accordance with IFRSs as issued by the IASB.
Basis for Opinion:
We conducted our audit in accordance with International
Standards on Auditing (ISAs) as issued by the IAASB and applicable
law.
Our responsibilities under those standards are further described
in the Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the group
in accordance with the International Ethics Standards Board for
Accountants' Code of Ethics for Professional Accountants (IESBA
Code) together with the ethical requirements that are relevant to
our audit of the group financial statements in the UK, and we have
fulfilled our other ethical responsibilities in accordance with
these requirements and the IESBA code. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current year. These matters were addressed in the
context of our audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate
opinion on these matters.
We have determined the following key audit matters and set out
our findings:
Key Audit Matter How the scope of our audit responded
to the key audit matter
Valuation and recoverability We reviewed the group's exploration
of exploration assets and, licences and permits to confirm
for the parent company, good title and standing. For licences
amounts due from subsidiary which had expired and are in the
and related undertakings process of renewal, we assessed
(refer notes 17,19, and the relevant factors, in conjunction
21). with discussions with management,
The carrying value of intangible regarding the likelihood of renewal.
assets as at 31 December We reviewed the terms and status
2021 is GBP16,993,769 (2020: of the joint venture agreements
GBP3,277,381) which comprises in place, in conjunction with the
royalty assets acquired accounting treatment adopted under
during the year and costs the terms of those agreements.
associated with exploration The early stage projects were reviewed
licenses and projects in for indicators of impairment in
Africa. The royalty assets accordance with IFRS 6. We discussed
are considered in more detail with management the scope of their
in a separate Key Audit future budgeted and planned expenditure
matter below. on the licence area.
The carrying value of investments The recoverability of amounts due
in subsidiaries, together from subsidiary and related undertakings
with intra-group receivables were assessed by reference to the
was GBP56,856194 (2020: underlying exploration projects.
GBP14,912,031) as at 31 Management's impairment assessments
December 2021. were reviewed for reasonableness.
Management is required to We reviewed the terms of the agreement
assess annually whether leading to the loss of control and
there is any indication deconsolidation of the assets in
that the group's intangible Legend Mali sarl. We reviewed the
assets are impaired, and accounting entries and ensured they
consider whether the carrying were in line with IFRS 10.
value exceeds the expected We considered any other information
recoverable amount. The obtained during the course of our
carrying value of investments work, including applicable subsequent
in subsidiaries, including events, to assess whether there
intra group receivables, were any potential indicators of
is directly linked to the impairment not identified by management.
underlying exploration assets.
Evaluating the recoverable
amount, particularly for
early stage royalty and
exploration projects, requires
significant estimation and
judgement. This makes this
area a key focus for the
audit.
Accounting treatment and Caserones
valuation of acquired royalty We reviewed the acquisition agreements
interests during the period and corporate structure of the proposed
(refer notes 17 and 20) royalty assets. We reviewed management's
During the year, the group assessment of the accounting treatment
entered into an agreement of the proposed structure and agreed
to acquire an effective that the entity holding the royalty
0.418% net smelter return should be accounted for as an investment
("NSR") royalty interest in associate under IFRS 11 and IAS
on the producing Caserones 28. We reviewed the good title to
Copper Mine of northern the assets shown.
Chile. The accounting treatment and entries
In December 2021, the group made upon acquisition were reviewed
also completed the first with reference to the royalty sale
stage of completion on the and purchase agreement and the consideration
acquisition of a portfolio was substantively tested.
of 24 royalty projects for We reviewed the equity accounting
US$24m. and recognition of the share of
There is a risk that the profit of the associate with reference
acquisitions have not been to the royalties received and dividends
correctly accounted for paid.
or valued in accordance We reviewed management's assessment
with the financial reporting of the carrying value of the assets
framework. and indicators of impairment.
Newcrest royalties
We reviewed the acquisition agreements
and corporate structure of the proposed
royalty assets. We reviewed management's
assessment of the accounting treatment
of the proposed structure and agreed
that the arrangement constituted
a jointly controlled operation under
IFRS 11 and as a result is accounted
for under the proportionate consolidation
method. We reviewed the good title
to the assets shown.
The accounting treatment and entries
made upon acquisition were reviewed
with reference to the royalty sale
and purchase agreement and the consideration
transferred was substantively tested.
We reviewed management's assessment
of the carrying value of the assets
and indicators of impairment.
==============================================
Other information
The other information comprises the information included in the
annual report and the management discussion and analysis, other
than the financial statements and our auditor's report thereon. The
directors are responsible for the other information.
Our opinion on the financial statements does not cover the other
information and we do not express any form of assurance conclusion
thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material
misstatement of the other information. If, based on the work we
have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of directors
As explained more fully in the directors' responsibilities
statement, the directors are responsible for the preparation and
fair presentation of the financial statements in accordance with
IFRSs, and for such internal control as the directors determine are
necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, the directors are
responsible for assessing the group's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the group or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit
conducted in accordance with International Standards on Auditing
(ISAs) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users
taken on the basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise
professional judgment and maintain professional scepticism
throughout the audit. We also:
-- Identify and assess the risks of material misstatement of the
group's financial statements, whether due to fraud or error, design
and perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal
control.
-- Obtain an understanding of internal control relevant to the
audit in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the group's internal control.
-- Evaluate the appropriateness of accounting policies used and
the reasonableness of accounting estimates and related disclosures
made by the Directors.
-- Conclude on the appropriateness of the Directors' use of the
going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the group's and
the parent company's ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to
draw attention in the auditor's report to the related disclosures
in the financial statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of the auditor's report. However,
future events or conditions may cause the group to cease to
continue as a going concern.
-- Evaluate the overall presentation, structure and content of
the financial statements, including the disclosures, and whether
the financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
-- Are required to report on consolidated financial statements,
obtain sufficient appropriate audit evidence regarding the
financial information of the entities or business activities within
the group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and
performance of the group audit. We remain solely responsible for
the audit opinion.
We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies
in internal control that we identify during our audit.
We also provide those charged with governance with a statement
that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and
other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the financial statements of the
current year and are therefore the key audit matters. We describe
these matters in our auditor's report unless law or regulation
precludes public disclosure about the matter or when, in extremely
rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public
interest benefits of such communication.
The partner in charge of the audit resulting in this independent
auditors' report is David Thompson.
David Thompson (Engagement Partner)
for and on behalf of PKF Littlejohn LLP
Statutory Auditor
15 Westferry Circus
Canary Wharf
London
E14 4HD
ALTUS STRATEGIES PLC
Group Statement of Comprehensive Income
For the Year Ended 31 December 2021
2021 2020
Continuing operations Notes GBP GBP
------------------------------------------ ----- ----------- -----------
Revenue and costs recovered
from JV partners 4 318,496 361,425
Exploration costs expensed 7 (3,205,673) (2,350,028)
Administrative expenses 8 (1,788,914) (848,794)
Listing and acquisition related
costs 9 (443,137) (88,440)
Foreign exchange gains/(losses) (273,221) (328,787)
Share based payments 31 (982,041) (663,945)
Loss from operations (6,374,490) (3,918,569)
Finance costs 13 (613,905) (4,923)
Other income/(expense) 14 227,150 1,938,615
Gain/(loss) on disposals 15 (461,869) 68,897
Fair value gain/(loss) on
financial assets at fair value
through profit or loss 15 44,937 (163,409)
Share of profit of associates
accounted for using the equity
method 21 984,727 -
Loss before taxation (5,691,842) (2,079,389)
Income tax 16 - -
------------------------------------------ ----- ----------- -----------
Loss for the year (6,193,450) (2,079,389)
Other comprehensive income
Exchange differences on retranslation
of net assets of subsidiaries 77,459 -
------------------------------------------ ----- ----------- -----------
Total comprehensive loss for
the year (6,115,991) (2,079,389)
------------------------------------------ ----- ----------- -----------
Loss for the year attributable
to:
* Owners of the parent company (6,190,057) (2,076,435)
* Non-controlling interest (3,393) (2,954)
------------------------------------------ ----- ----------- -----------
(6,193,450) (2,079,389)
Total comprehensive loss for
the year attributable to:
* Owners of the parent company (6,112,598) (2,076,435)
* Non-controlling interest (3,393) (2,954)
------------------------------------------ ----- ----------- -----------
(6,115,991) (2,079,389)
Earnings per share (pence)
attributable to the owners
of the parent
Basic earnings per share 17 (7.77) (3.12)
------------------------------------------ ----- ----------- -----------
The notes on pages 87-119 form part of these financial
statements.
ALTUS STRATEGIES PLC
Group Statement of Financial Position
As at 31 December 2021
Company Registration No. 10746796
2021 2020
Notes GBP GBP
----------------------------------- ----- ------------ ------------
Non-current assets
Intangible assets 18 16,993,769 3,277,381
Property, plant and equipment 19 30,382 4,720
Right of use assets 33 103,671 60,198
Investments in associates
accounted for using the equity
method 21 25,366,597 -
Investments at fair value
through profit or loss 22 1,721,039 1,320,542
----------------------------------- ----- ------------ ------------
44,215,458 4,662,841
Current assets
Trade and other receivables 23 622,164 853,629
Assets classified as held-for-sale 24 117,967 86,765
Cash and cash equivalents 6,355,011 5,937,486
----------------------------------- ----- ------------ ------------
7,095,142 6,877,880
----------------------------------- ----- ------------ ------------
Total assets 51,310,600 11,540,721
Current liabilities
Trade and other payables 25 (986,247) (1,144,754)
Borrowings 26 (18,348,516) -
Liabilities classified as
held-for-sale 24 (34,020) (34,020)
Provisions 27 (15,000) (15,000)
----------------------------------- ----- ------------ ------------
(19,383,783) (1,193,774)
Non-current liabilities
Trade and other payables 21 25 (64,671) (45,848)
----------------------------------- ----- ------------ ------------
Total liabilities (19,448,454) (1,239,622)
Net current assets/(liabilities) (12,288,641) 5,684,106
----------------------------------- ----- ------------ ------------
Net assets 31,862,146 10,301,099
----------------------------------- ----- ------------ ------------
Equity
Share capital 32 5,866,084 3,504,580
Share premium 32 37,555,608 13,222,115
Share based payment reserve 31 1,613,440 631,399
Other reserves 5,722,494 5,645,035
Retained earnings (18,790,806) (12,600,749)
----------------------------------- ----- ------------ ------------
Total equity attributable
to owners of the parent 31,966,820 10,402,380
Non-controlling interest (104,674) (101,281)
----------------------------------- ----- ------------ ------------
Total equity 31,862,146 10,301,099
The notes on pages 87-119 form part of these financial
statements. The financial statements were approved by the Board of
Directors and authorised for issue on 28 April 2022 and are signed
on its behalf by:
Steven Poulton
Chief Executive Officer
ALTUS STRATEGIES PLC
Company Statement of Financial Position
As at 31 December 2021
Company Registration No. 10746796
2021 2020
Notes GBP GBP
---------------------------- ----- ------------ -----------
Non-current assets
Investments in subsidiaries 20 4,608,930 4,608,930
Investments at fair value
through profit or loss 22 318,760 413,634
---------------------------- ----- ------------ -----------
4,927,690 5,022,564
Current assets
Trade and other receivables 23 52,388,337 10,375,059
Cash and cash equivalents 2,273,965 460,131
---------------------------- ----- ------------ -----------
54,662,302 10,835,190
---------------------------- ----- ------------ -----------
Total assets 59,589,992 15,857,754
Current liabilities
Trade and other payables 25 (2,602,268) (328,404)
Borrowings 26 (18,348,516) -
---------------------------- ----- ------------ -----------
Total liabilities (20,950,784) (328,404)
Net current assets 33,711,518 10,506,786
---------------------------- ----- ------------ -----------
Net assets 38,639,208 15,529,350
---------------------------- ----- ------------ -----------
Equity
Called up share capital 32 5,866,084 3,504,580
Share premium 32 37,555,608 13,222,115
Other reserves 31 1,613,440 631,399
Retained earnings (6,395,924) (1,828,744)
Total equity 38,639,208 15,529,350
---------------------------- ----- ------------ -----------
As permitted by Section 408 of the Companies Act 2006, the
Company has not presented its own statement of comprehensive income
and related notes. The Company's loss for the year was GBP4,567,180
(2020: loss of GBP950,812).
The notes on pages 87-119 form part of these financial
statements.
The financial statements were approved by the Board of Directors
and authorised for issue on 28 April 2022 and are signed on its
behalf by:
Steven Poulton
Chief Executive Officer
ALTUS STRATEGIES PLC
Group Statement of Changes in Equity
For the Year Ended 31 December 2021
Share Share Other Retained Total Non-controlling
Notes capital premium reserves earnings equity interest Total
GBP GBP GBP GBP GBP GBP GBP
--------------- ------ ---------- ----------- ---------- ------------- ------------ ---------------- ------------
Balance at 1
January 2020 2,102,284 7,378,369 5,672,491 (10,524,314) 4,628,830 (98,327) 4,530,503
Year ended 31
December 2020
Total
comprehensive
loss for
the year - - - (2,076,435) (2,076,435) (2,954) (2,079,389)
Issue of share
capital 32 1,402,296 5,843,746 - - 7,246,042 - 7,246,042
Share based
payments 31 - - 603,943 - 603,943 - 603,943
Total
transactions
with owners,
recognised
directly in
equity 1,402,296 5,843,746 603,943 - 7,849,985 - 7,849,985
--------------- ------ ---------- ----------- ---------- ------------- ------------ ---------------- ------------
Balance at 31
December 2020 3,504,580 13,222,115 6,276,434 (12,600,749) 10,402,380 (101,281) 10,301,099
--------------- ------ ---------- ----------- ---------- ------------- ------------ ---------------- ------------
Year ended 31
December 2021
Total
comprehensive
loss for
the year - - 77,459 (6,190,057) (6,112,598) (3,393) (6,115,991)
Issue of share
capital 32 2,359,841 24,313,586 - - 26,673,427 - 26,673,427
Issue of
warrants 31 - - 3,863 - 3,863 - 3,863
Exercise of
warrants 32 1,663 19,907 - - 21,570 - 21,570
Share based
payments 31 - - 978,178 - 978,178 - 978,178
Total
transactions
with owners,
recognised
directly in
equity 2,361,504 24,333,493 982,041 - 27,677,038 - 27,677,038
--------------- ------ ---------- ----------- ---------- ------------- ------------ ---------------- ------------
Balance at 31
December 2021 5,866,084 37,555,608 7,335,934 (18,790,806) 31,966,820 (104,674) 31,862,146
--------------- ------ ---------- ----------- ---------- ------------- ------------ ---------------- ------------
The notes on pages 87-119 form part of these financial
statements.
ALTUS STRATEGIES PLC
Company Statement of Changes in Equity
For the Year Ended 31 December 2021
Share Share premium Other Retained
capital account reserves earnings Total
Notes GBP GBP GBP GBP GBP
----------------------------- ----- -------------- ------------- --------- ----------- -----------
Balance at 1 January
2020 2,102,284 7,378,369 27,456 (877,932) 8,630,177
Year ended 31 December
2020
Loss and total comprehensive
income for the year - - - (950,812) (950,812)
----------------------------- ----- -------------- ------------- --------- ----------- -----------
Issue of share capital 32 1,402,296 5,843,746 - - 7,246,042
Share based payments 31 - - 603,943 - 603,943
Total transactions
with owners, recognised
directly in equity 1,402,296 5,843,746 603,943 - 7,849,985
Balance at 31 December
2020 3,504,580 13,222,115 631,399 (1,828,744) 15,529,350
----------------------------- ----- -------------- ------------- --------- ----------- -----------
Year ended 31 December
2021
Loss and total comprehensive
income for the year - - - (4,567,180) (4,567,180)
----------------------------- ----- -------------- ------------- --------- ----------- -----------
Issue of share capital 32 2,359,841 24,313,586 - - 26,673,427
Issue of warrants 31 - - 3,863 - 3,863
Exercise of warrants 32 1,663 19,907 - - 21,570
Share based payments 31 - - 978,178 - 978,178
----------------------------- ----- -------------- ------------- --------- ----------- -----------
Total transactions
with owners, recognised
directly in equity 2,361,504 24,333,493 982,041 - 27,677,038
Balance at 31 December
2021 5,866,084 37,555,608 1,613,440 (6,395,924) 38,639,208
----------------------------- ----- -------------- ------------- --------- ----------- -----------
The notes on pages 87-119 form part of these financial
statements.
ALTUS STRATEGIES PLC
Group Statement of Cash Flows
For the Year Ended 31 December 2021
2021 2020
GBP GBP
---------------------------------------------- ------------- ------------
Cash flows from operating activities
Loss from continuing operations (6,193,450) (2,079,389)
Net interest paid 613,905 4,923
Depreciation 7,342 23,845
Impairment of intangible assets 569,777 20,952
Equity-settled share based payments 982,041 663,945
Bad debt provision - (430)
Fair value (gain)/loss on investments (44,937) 94,512
Receipt of shares as consideration - (1,180,838)
Loss on disposal of subsidiary (non-cash) 461,869 -
Share of profit of associate (984,727) -
Decrease/(increase) in trade and other
receivables 53,050 (609,255)
Increase/(decrease) in trade and other
payables 1,234,944 387,622
Other working capital - (2,364)
Net cash outflow used in operating
activities (3,300,187) (2,676,477)
Investing activities
Investment in associate (24,529,906) -
Dividend payment from associate 463,722 -
Purchase of intangible assets (15,511,111) (95,383)
Purchase of property, plant and equipment (33,004) (5,310)
Deconsolidated cash on disposal of (31,466) -
subsidiary
Interest received - 1,775
Interest paid - (4,947)
---------------------------------------------- ------------- ------------
Net cash used in investing activities (39,641,765) (103,865)
Financing activities
Net proceeds from the issue of shares 26,694,996 6,523,561
Loan from related party 21,068,997 -
Loan repayment to related party (3,761,762) -
Interest paid on borrowings (613,905) -
Principal element of lease payments (23,310) (13,473)
Interest element of lease payments (5,540) (4,902)
Net cash generated from financing activities 43,359,476 6,505,186
Net increase in cash and cash equivalents 417,525 3,724,844
---------------------------------------------- ------------- ------------
Cash and cash equivalents at beginning
of the year 5,937,486 2,212,642
Cash and cash equivalents at end of
the year 6,355,011 5,937,486
Significant non-cash transactions
Significant non-cash transactions are detailed in note 35.
The notes on pages 87-119 form part of these financial
statements.
ALTUS STRATEGIES PLC
Company Statement of Cash Flows
For the Year Ended 31 December 2021
2021 2020
GBP GBP
---------------------------------------------- ------------- ------------
Cash flows from operating activities
Loss before tax (4,567,180) (950,812)
Net interest paid 613,905 396
Fair value (gain) / loss on investments 94,874 (132,848)
Equity-settled share based payments 982,041 663,943
Receipt of shares as consideration - (71,833)
Increase in trade and other receivables (69,116) (55,271)
Increase in trade and other payables 1,071,328 36,691
Increase in intercompany balances (39,700,344) (5,772,643)
Net cash used in operating activities (41,574,492) (6,282,377)
Investing activities
Interest paid - (396)
---------------------------------------------- ------------- ------------
Net cash used in investing activities - (396)
Financing activities
Net proceeds from the issue of shares 26,694,996 6,523,561
Loan from related party 21,068,997 -
Loan repayment to related party (3,761,762) -
Interest paid on borrowings (613,905) -
---------------------------------------------- ------------- ------------
Net cash generated from financing activities 43,388,326 6,523,561
Net increase in cash and cash equivalents 1,813,834 240,788
---------------------------------------------- ------------- ------------
Cash and cash equivalents at beginning
of the year 460,131 219,343
Cash and cash equivalents at end of the
year 2,273,965 460,131
---------------------------------------------- ------------- ------------
Significant non- cash transactions
Significant non-cash transactions are detailed in note 35.
The notes on pages 87-119 form part of these financial
statements.
ALTUS STRATEGIES PLC
Notes to the Financial Statements
For the Year Ended 31 December 2021
1 Accounting policies
Company information
Altus Strategies plc is a public company limited by shares and
incorporated in England and Wales. The registered office is 14
Station Road, Didcot, Oxfordshire, OX11 7LL, United Kingdom. The
Group consists of Altus Strategies plc and all of its subsidiaries,
as listed in note 20.
Basis of preparation
These financial statements have been prepared in accordance with
UK-adopted International Accounting Standards and IFRS
interpretations committee (IFRS IC) interpretations issued by the
IASB. The consolidated financial statements have also been prepared
in accordance with those parts of the Companies Act 2006 applicable
to companies reporting under IFRS, (except as otherwise
stated).
The financial statements have been prepared on the historical
cost basis, as modified by the valuation of financial assets at
fair value through profit or loss. The principal accounting
policies adopted are set out below.
The financial statements are presented in British Pounds
Sterling (GBP), which is also the functional currency of the
Company. Monetary amounts in these financial statements are rounded
to the nearest whole pound.
As permitted by section 408 of the Companies Act 2006, the
Company has not presented its own statement of comprehensive income
and related notes. The Company's loss for the year was GBP4,567,180
(2020: loss of GBP950,812).
Basis of consolidation
The consolidated financial statements comprise the financial
statements of Altus Strategies plc and its subsidiaries as at 31
December 2021. Subsidiaries are fully consolidated from the date on
which control is transferred to the Group.
Control is achieved when the Group is exposed, or has rights, to
variable returns from its involvement with the investee and has the
ability to affect those returns through its power over the
investee. Specifically, the Group controls an investee if, and only
if, the Group has:
- power over the investee (i.e. existing rights that give it the
current ability to direct the relevant activities of the
investee)
- Exposure, or rights, to variable returns from its involvement with the investee
- The ability to use its power over the investee to affect its future
Generally, there is a presumption that a majority of the voting
rights results in control. To support this presumption and when the
Group has less than a majority of the voting rights or similar
rights of an investee, the Group considers all relevant facts and
circumstances in assessing whether it has the power over an
investee, including:
- The contractual arrangements with the other vote holders of the investee
- Rights arising from other contractual arrangements
- The Group's voting rights and potential voting rights
The Group re-assesses whether or not it controls an investee if
facts and circumstances indicate that there are changes to one or
more of the three elements of control. Consolidation of a
subsidiary begins when the Group obtains control over the
subsidiary and ceases when the Group loses control of the
subsidiary. Assets, liabilities, income and expenses of a
subsidiary acquired or disposed of during the year are included in
the consolidated financial statements from the date the Group gains
control until the date the Group ceases to control the
subsidiary.
"Joint ventures" as referred to in the financial statements
refer to agreements with exploration partners and not joint
ventures as defined within IFRS 11.
Profit or loss and each component of other comprehensive income
are attributed to the equity holders of the parent company of the
Group and to the non-controlling interests, even if this results in
the non-controlling interests having a deficit balance.
Entities are recognised as joint operations if:
- Their legal form gives parties rights to the assets and
obligations for the liabilities relating to the joint
arrangement
- The contractual terms of the joint arrangement specify that
parties have rights to the assets and obligations for the
liabilities relating to the arrangement
- The arrangement has been designed by the parties so that its
activities provide the parties with an output which represents
rights to substantially all of the economic benefits of the assets
held in the separate vehicle
Joint operations are accounted for on a proportional assets and
liabilities basis.
Investments in associates are accounted for using the equity
method, with initial measurement based on costs of acquisition
including transaction costs. The carrying amount is adjusted to
recognise the Group's share of the change in net assets after the
date of acquisition. Distributions received from an associate
reduce the carrying amount of the investment. The Company's share
of post-acquisition profit or loss is recognised in the Statement
of Comprehensive Income based on its economic interest in the
associate.
All intra-group assets and liabilities, equity income, expense
and cash flows relating to transactions between members of the
Group are eliminated in full on consolidation.
Going concern
During the year, the Company raised a total GBP27.5 million
(C$47.1 million) in two equity fundraisings. In March 2021, the
Company raised GBP7.7 million (C$13.4 million) through a placement
of 10,266,668 Ordinary Shares of the Company at a price of GBP0.75
(C$1.30) per share with existing and new institutional and private
investors. La Mancha and certain directors and employees of the
Group participated in the placement.
In December 2021, the Company raised GBP19.8 million (C$33.7
million) before expenses through a placement of 36,930,143 Ordinary
Shares of the Company at a price of GBP0.535 (C$0.90) per share
with new and existing institutional investors and private
investors. La Mancha and certain directors and employees of the
Group participated in the placement.
The Directors have assessed the cash resources available to the
Company, including balances of cash and investments held in
publicly traded companies at the reporting date. They have reviewed
a detailed 24-month budget prepared by the Company, assessing the
likelihood of receiving projected royalty and other income, debt
coverage and the breakdown between committed and discretionary
projected expenditure. Given the Company's previous statement of
the low impact of Covid-19 on operations in the short-to-medium
term, a renewed outbreak of Covid-19 has not been included in the
analysis. Based on their assessment, the Directors anticipate that
net income from the current portfolio of royalties is unlikely to
be sufficient to cover exploration and other costs of the business
over the next 12 months and that in that period the Company may
have to raise additional funding. In making their assessment, the
Directors acknowledged the existence of a number of material
uncertainties including volatility in financial and commodity
markets, and political and security risks. These and other risks
faced by the Company are outlined in detail in the Strategic Report
on pages 21 to 23.
The Company's loan liability to La Mancha, the balance of which
was GBP18.3 million at 31 December 2021, is repayable by 30 June
2022. As at the date of this report, a re-financing of the loan has
not been put in place. The Directors note that, were the Company
unable to secure a re-financing of the loan, it could potentially
impact the Company's ability to maintain its current business
operations, and acknowledge that this constitutes a material
uncertainty. However, the Directors also note that Altus has
received a number of proposals to re-finance the loan before 30
June 2022, and they remain confident that the necessary funding
will be secured.
Based on their assessment, the Directors have, at the time of
approving the financial statements, a reasonable expectation that
the Group will have adequate resources to continue in operational
existence for the foreseeable future. Therefore, the Directors
continue to adopt the going concern basis of accounting in
preparing the financial statements.
Exceptional items
Exceptional items are disclosed separately in the financial
statements where it is necessary to do so, to provide further
understanding of the financial performance of the Group. They are
material items of income or expense that have been shown separately
due to the significance of their nature or amount. Listing and
acquisition related costs are included as exceptional items in
profit or loss.
Fair value measurement
IFRS 13 establishes a single source of guidance for all fair
value measurements. IFRS 13 does not change when an entity is
required to use fair value, but rather provides guidance on how to
measure fair value under IFRS when fair value is required or
permitted. The resulting calculations under IFRS 13 affected the
principles that the Group uses to assess the fair value, but the
assessment of fair value under IFRS 13 has not materially changed
the fair values recognised or disclosed. IFRS 13 mainly impacts the
disclosures of the Company. It requires specific disclosures about
fair value measurements and disclosures of fair values, some of
which replace existing disclosure requirements in other standards.
IFRS 13 applies a three-level hierarchy, from level 1 for regularly
traded assets with a readily ascertainable market value to level 3
for rarely traded assets which require a high degree of estimation
to ascertain their value. Fair value is applied to the following
elements of the Company's assets.
Subsidiaries Note 20 Level
2
Investments Note 22 Level
1
------------- -------- ------
Foreign exchange
Transactions in currencies other than pounds sterling are
recorded at the rates of exchange prevailing at the date of the
transactions. At each reporting end date, monetary assets and
liabilities that are denominated in foreign currencies are
retranslated at the rates prevailing on the reporting end date.
Gains and losses arising on translation are included in the
Statement of Comprehensive Income for the period.
Other reserves
Other reserves consist of a non-distributable merger reserve
from historic acquisitions and the foreign currency translation
reserve.
2 Adoption of new and revised standards and changes in accounting policies
New and amended standards adopted by the Group and Company
The Group and Company have applied the following standards and
amendments for the first time for its annual reporting period
commencing 1 January 2021:
- Amendment to IFRS 16: Leases - COVID 19 - Related Rent Concessions
The Group and Company has assessed the adoption of these
standards and amendments and there has been no material impact on
the financial statements as a result of the adoption.
New and revised IFRSs in issue but not yet effective
The Group and Company have not applied the following new and
revised Standards and Interpretations that have been issued but are
not yet effective:
Effective
date
Amendments to IAS 1: Presentation of Financial Statements: TBC*
Classification of Liabilities as Current or Non-Current
Amendments to IAS 8: Accounting policies, Changes in TBC*
Accounting Estimates and Errors: Definition of Accounting
Estimates
Amendments to IAS 16: Property, Plant and Equipment TBC*
Amendments to IAS 37: Provisions, Contingent Liabilities TBC*
and Contingent Assets
Annual Improvements to IFRS Standards 2018-2020 Cycle TBC*
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS TBC*
16: Interest Rate Benchmark Reform - Phase 2
----------------------------------------------------------- ----------
* subject to endorsement
The Group and Company are evaluating the impact of the new and
amended standards above. The Directors believe that these new and
amended standards are not expected to have a material impact on the
Group and Company's results or shareholders' funds.
3 Critical accounting estimates and judgements
The Group makes estimates and assumptions concerning the future.
The resulting accounting estimates will seldom equal the related
actual results. The estimates and assumptions that have a
significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year
are as follows.
Exploration and development costs Note 7
Fair value of financial assets Note 15
Impairment of intangible assets Note 18
Investments in associates Note 21
Share based payments Note 31
---------------------------------- --------
4 Revenue and costs recovered from JV partners
Costs recovered from JV partners and management fees relating to
JV projects are recognised in the month in which they arise.
Milestone payments, which relate to various stages of JV projects
including on signature of an agreement, election by the JV partner
to proceed to the next project stage, definition of a resource or
completion of a feasibility study, are recognised once the
Company's performance obligation is satisfied, in accordance with
IFRS 15 Revenue from Contracts with Customers. Royalty income
received by associate companies is included in the share of profit
or loss on associate (see note 21).
2021 2020
GBP GBP
---------------------------------- -------- --------
Costs recovered from JV partners 4,747 298,891
Milestone payments 293,923 38,262
Management fees 19,826 24,272
Total 318,496 361,425
----------------------------------- -------- --------
5 Segmental analysis
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker, which is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the Board of Directors.
UK Africa S. America Australia Total
2021 2021 2021 2021 2021
Group GBP GBP GBP GBP GBP
----------------------------- ------------- ------------ ----------- ----------- -------------
Revenue and costs recovered
from JV partners 64,573 253,923 - - 318,496
Share of profit of
associates - - 984,727 - 984,727
Loss from operations (3,680,462) (2,542,994) (151,035) - (6,374,490)
Reportable segment
assets 8,510,123 2,241,132 25,460,350 15,098,995 51,310,600
Reportable segment
liabilities (19,320,381) (127,892) (181) - (19,448,454)
----------------------------- ------------- ------------ ----------- ----------- -------------
UK Africa S. America Australia Total
2020 2020 2020 2020 2020
GBP GBP GBP GBP GBP
----------------------------- ------------- ------------ ----------- ----------- -------------
Revenue and costs recovered
from JV partners 2,983 358,442 - - 361,425
Share of profit of - - - - -
associates
Loss from operations (2,882,546) (1,036,023) - - (3,918,569)
Reportable segment
assets 7,701,600 3,839,121 - - 11,540,721
Reportable segment
liabilities (991,704) (247,918) - - (1,239,622)
----------------------------- ------------- ------------ ----------- ----------- -------------
6 Operating loss
2021 2020
Operating loss for the year is stated GBP GBP
after
----------------------------------------- ---------- ----------
Exchange (gains)/losses (44,937) 328,790
Exploration and development costs (note
7) 3,205,673 2,350,028
Depreciation (including right-of-use
assets, note 8) 31,540 23,845
Operating lease charges 25,531 20,604
Listing and acquisition related costs 443,137 88,440
Share-based payments 982,041 663,945
------------------------------------------ ---------- ----------
7 Exploration and development costs
The Group's costs derived from its operations in countries in
which it holds exploration licences are detailed below.
Cameroon Egypt Ethiopia Mali Morocco Other Total
2021 2021 2021 2021 2021 2021 2021
Cost category GBP GBP GBP GBP GBP GBP GBP
----------------------- --------- -------- --------- ---------- -------- ------- ----------
Drilling - - - 725,309 - - 725,309
Assays 58,131 - - 231,507 7,824 - 297,462
Other operational
costs 4,623 60,248 640 231,351 16,586 - 313,448
Salaries - Africa
geologists 33,063 54,761 63,700 198,284 37,643 - 387,451
Salaries - UK
geologists 37,526 75,051 37,526 75,051 75,051 - 300,205
Salaries - UK
managers 25,800 51,601 25,800 51,601 51,601 - 206,403
Salaries - Africa
support 12,602 835 16,464 27,133 28,598 - 85,632
Salaries - UK
support 20,187 40,374 20,187 40,374 40,374 - 161,496
Technical consultants 10,547 29,477 116 26,575 92,496 - 159,211
Travel 11,693 57,060 2,225 121,060 58,116 - 250,154
Africa office
rent 9,627 1,214 2,246 6,608 5,836 - 25,531
Africa support
costs 66,065 54,514 7,625 140,811 14,595 9,385 292,995
UK support costs - - - - - 376 376
----------------------- --------- -------- --------- ---------- -------- ------- ----------
Total 289,864 425,135 176,529 1,875,664 428,720 9,761 3,205,673
Costs recovered
from
JV partners - - - (4,747) - - (4,747)
Costs not recovered 289,864 425,135 176,529 1,870,917 428,720 9,761 3,200,926
----------------------- --------- -------- --------- ---------- -------- ------- ----------
Cameroon Egypt Ethiopia Mali Morocco Other Total
2020 2020 2020 2020 2020 2020 2020
Cost category GBP GBP GBP GBP GBP GBP GBP
----------------------- --------- -------- --------- ---------- -------- ------- ----------
Drilling - - - 891,144 - - 891,144
Assays 14,208 - 5,580 23,555 6,106 - 49,449
Other operational
costs 10,616 7,380 3,259 63,753 6,794 2,858 94,660
Salaries - Africa
geologists 36,815 - 27,629 63,326 24,318 - 152,088
Salaries - UK
geologists 41,047 - 41,047 54,730 54,730 13,682 205,236
Salaries - UK
managers 50,847 - 50,871 67,828 67,828 16,957 254,331
Salaries - Africa
support 22,597 - 17,316 25,257 28,456 - 93,626
Salaries - UK
support 25,516 - 25,516 34,021 34,021 8,505 127,579
Technical consultants - - 2,695 94,669 5,602 - 102,966
Travel 43,870 27 5,211 81,667 8,066 - 138,841
Africa office
rent 7,855 - 4,147 2,736 5,866 - 20,604
Africa support
costs 58,529 54 11,730 83,126 17,109 11,163 181,711
UK support costs 6,857 96 6,498 11,064 8,609 4,669 37,793
----------------------- --------- -------- --------- ---------- -------- ------- ----------
Total 318,757 7,557 201,499 1,496,876 267,505 57,834 2,350,028
Costs recovered
from
JV partners - - - (267,493) - - (267,493)
Costs not recovered 318,754 7,557 201,500 1,229,383 267,506 57,835 2,082,535
----------------------- --------- -------- --------- ---------- -------- ------- ----------
These figures include an allocation of UK costs including
geologists' salaries, management time and UK support costs, based
on the number of projects running in each country during the year.
During the year, the Group was awarded four projects in Egypt and
10 projects in Morocco, and it relinquished one project in Mali
(Pitiangoma Est).
8 Administrative expenses
Administrative expenses include the balances in the table
below.
2021 2020
Group GBP GBP
--------------------------------- ---------- --------
Employee costs (note 11) 659,940 392,723
Consultants and contractors - 3,000
Legal fees 47,402 75,547
Audit, accountancy & tax 52,665 87,535
Registrar and Nomad fees 102,132 76,646
Investor relations 148,332 66,109
Other professional expenses 106,189 68,726
Travel expenses 11,123 7,979
Premises and office expenses 58,975 20,127
Depreciation of property, plant
and equipment 7,342 3,780
Depreciation of leased assets 24,198 20,064
Impairment of licence 569,777 20,952
Other expenses 839 5,606
---------------------------------- ---------- --------
1,788,914 848,794
--------------------------------- ---------- --------
9 Listing and acquisition related costs
Listing and acquisition related costs primarily related to the
acquisitions of the Caserones royalty and Newcrest portfolio of
royalties and were as follows.
2021 2020
GBP GBP
------------- -------- -------
Legal fees 252,594 5,139
Tax advice 39,878 15,117
Stamp duty 145,642 -
Other costs 5,023 68,184
------------- -------- -------
443,137 88,440
------------- -------- -------
10 Auditor's remuneration
Fees payable to the company's auditor for the financial year
were as follows.
2021 2020
For audit services GBP GBP
------------------------------------------------ ------- -------
Audit of the financial statements of the group
and company 30,000 25,500
------------------------------------------------ ------- -------
11 Employees
Employee benefits
The costs of short-term employee benefits are recognised as a
liability and an expense unless those costs are required to be
recognised as part of the cost of inventories or non-current
assets. The cost of any unused holiday entitlement is recognised in
the period in which the employee's services are received.
Termination benefits are recognised immediately as an expense when
the Group is demonstrably committed to terminate the employment of
an employee or to provide termination benefits.
The average number of employees of the Group during the year was
as follows. Altus Strategies plc has no employees and incurs no
remuneration costs.
2021 2020
Group Number Number
-------------------------------------- ------- -------
Directors 6 6
Employees (excluding consultants and
associates) 34 24
-------------------------------------- ------- -------
40 30
-------------------------------------- ------- -------
Of the employees, ten (2020: eight) were employed in the UK and
24 (2020: 16) were employed in five (2020: four) countries in
Africa. Remuneration of African-contracted employees is included in
Exploration Costs, while remuneration of Directors and
UK-contracted employees is allocated between Exploration and
Administrative Costs on a time basis. Costs for the year were as
follows.
2021 2020
Group GBP GBP
---------------------------------------------- ---------- ----------
Exploration staff costs 1,213,262 817,328
Administrative staff costs 659,940 392,723
1,873,202 1,210,051
Wages, salaries and Non-executive Directors'
fees 909,442 654,087
Contractors 149,146 32,493
Bonuses 100,000 168,000
Social security costs 91,293 93,772
Pension costs 78,161 45,924
Other costs - 2,733
---------------------------------------------- ---------- ----------
Total UK costs 1,328,042 997,009
---------------------------------------------- ---------- ----------
Overseas staff 545,160 213,042
---------------------------------------------- ---------- ----------
1,873,202 1,210,051
---------------------------------------------- ---------- ----------
Share based payments 978,178 603,942
---------------------------------------------- ---------- ----------
2,851,380 1,813,993
---------------------------------------------- ---------- ----------
12 Directors' remuneration
Details of Directors' remuneration are included in the
Directors' Remuneration Report on pages 63-67.
Fees/salaries Bonuses Pensions Total
2021 2020 2021 2020 2021 2020 2021 2020
--------------------- -------- -------- ------- -------- ------- ------- -------- ----------
GBP GBP GBP GBP GBP GBP GBP GBP
--------------------- -------- -------- ------- -------- ------- ------- -------- ----------
Non-executive
Directors
D. Netherway 45,000 35,000 - - - - 45,000 35,000
R. Milroy 35,000 25,000 - - - - 35,000 25,000
M. Winn 25,000 20,000 - - - - 25,000 20,000
K. Nasr 25,000 11,080 - - - - 25,000 11,080
Executive Directors
S. Poulton 175,000 125,000 50,000 62,500 17,500 12,500 242,500 200,000
M. Grainger 110,000 100,000 15,000 50,000 11,000 10,000 136,000 160,000
--------------------- -------- -------- ------- -------- ------- ------- -------- ----------
Total 415,000 316,080 65,000 112,500 28,500 22,500 508,500 451,080
--------------------- -------- -------- ------- -------- ------- ------- -------- ----------
During 2021 retirement benefits accrued under defined
contribution schemes for two Executive Directors (2020: two
Directors).
13 Finance (costs)/ income
2021 2020
Group GBP GBP
---------------------------------------------- ---------- --------
Interest on bank deposits - 1,775
Interest on lease liabilities (note 33) (5,541) (6,302)
Interest on loan from LMH Explorers S.à (608,364) -
r.l. (note 26)
Other interest / Finance costs - (396)
---------------------------------------------- ---------- --------
(613,905) (4,923)
---------------------------------------------- ---------- --------
14 Other income
Other income for the financial year was as follows.
2021 2020
Group GBP GBP
------------------------------------------ -------- ----------
Receipt of shares in respect of contract
termination - 1,726,578
R&D tax credit 218,532 206,040
Event sponsorship 4,313 5,750
COVID-19 rent concession 4,289 -
Other income 16 247
------------------------------------------- -------- ----------
227,150 1,938,615
------------------------------------------ -------- ----------
15 Other gains and losses
See note 28 for accounting policy and detail of financial assets
held at fair value through profit or loss. Fair value of
investments is a Level 1 valuation under IFRS 13 as it is based on
quoted market prices of tradable securities.
2021 2020
GBP GBP
Group
---------------------------------------------- ---------- ----------
Unrealised
Gain/(loss) on revaluation of investments (217,082) (162,368)
Other unrealised gains/(losses) 262,019 (1,041)
---------------------------------------------- ---------- ----------
Total fair value gains/(losses) on financial
assets at fair value through profit or
loss 44,937 (163,409)
Realised
Gain/(loss) on disposal of fixed assets 2,586 -
Gain/(loss) on disposal of subsidiaries
(note 20) (464,455) 68,897
---------------------------------------------- ---------- ----------
(461,869) (94,512)
---------------------------------------------- ---------- ----------
16 Income tax
Income tax represents the sum of the tax currently payable and
deferred tax.
Current tax
Current tax is based on taxable profit or loss for the year.
Taxable profit or loss differs from net profit or loss as reported
in the Statement of Comprehensive Income because it excludes items
of income or expense that are taxable or deductible in other years
and it further excludes items that are never taxable or deductible.
Current tax is calculated using tax rates that have been enacted or
substantively enacted by the reporting end date.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in
the computation of taxable profit or loss, and is accounted for
using the balance sheet liability method. Deferred tax liabilities
are generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which
deductible temporary differences can be utilised. Such assets and
liabilities are not recognised if the temporary difference arises
from the initial recognition of other assets and liabilities in a
transaction that affects neither the tax profit nor the accounting
profit.
Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled or the asset is
realised. Deferred tax is charged or credited in the income
statement, except when it relates to items charged or credited
directly to equity, in which case the deferred tax is also dealt
with in equity. Deferred tax assets and liabilities are offset when
the company has a legally enforceable right to offset current tax
assets and liabilities and the deferred tax assets and liabilities
relate to taxes levied by the same tax authority.
Current tax for the year for the Company was GBPnil (2020:
GBPnil), as follows.
2021 2020
Group GBP GBP
------------------- ----- -----
Income tax expense - -
------------------- ----- -----
The tax on the Group's loss before tax differs from the
theoretical amount that would arise using the weighted average tax
rate applicable to profits/ (losses) of the consolidated entities
as follows.
2021 2020
Group GBP GBP
---------------------------------------------------------------------- ------------ ------------
Loss before taxation (6,193,450) (2,079,389)
Expected tax charge based on the standard rate
of corporation tax in the UK of 19% (2020:
19%)
%)3 (1,176,756) (395,084)
---------------------------------------------------------------------- ------------ ------------
Tax effect of:
* Expenses not deductible for tax purposes 292,591 181,819
* Impairment not deductible for tax purposes 52,953 3,981
* Unutilised tax losses for which no deferred tax asset
is recognised 831,212 209,284
Tax expense for the year - -
---------------------------------------------------------------------- ------------ ------------
The Group has tax losses of approximately GBP2,758,000 (2020:
GBP1,927,000) available to carry forward against future taxable
profits. No deferred tax asset has been recognised in view of the
uncertainty over the timing of future taxable profits against which
the losses may be offset. An increase in the UK corporate tax rate
from 19% to 25% (effective from 1 April 2023) was substantively
enacted on 14 May 2021.
17 Earnings per share
The basic loss per share is calculated by dividing the loss
attributable to owners of the parent company by the weighted
average number of Ordinary Shares in issue during the year.
Dilution is represented by a number of warrants and options
outstanding, which at the end of the year numbered 5,541,388 and
5,675,000 respectively. No diluted earnings per share is presented
as the loss-making nature means the warrants and options are
anti-dilutive.
2021 2020
-------------------------------------------- ------------ ------------
Loss attributable to owners (GBP) (6,190,057) (2,076,435)
Weighted average number of Ordinary Shares
in issue 79,670,038 66,475,493
Basic loss per share (pence) (7.77) (3.12)
-------------------------------------------- ------------ ------------
18 Intangible assets
Expenditure on exploration activities is written off against
profit or loss in the year in which it is incurred. Identifiable
development expenditure is capitalised to the extent that the
technical, commercial and financial feasibility can be
demonstrated. Amortisation is recognised so as to write off the
cost or valuation of assets less their residual values over their
useful lives on the following basis.
- Deferred exploration costs: Not amortised
Deferred exploration costs comprise exploration licence fees
capitalised in accordance with IFRS 6 'Exploration for and
Evaluation of Mineral Resources'. Licences are initially measured
at cost. Management tests quarterly whether deferred exploration
costs require impairment. Each exploration licence is subject to a
quarterly review either by a consultant or senior Company geologist
to determine if the exploration results returned to date warrant
further exploration expenditure and have the potential to result in
an economic discovery. This review takes into consideration
long-term metal prices, anticipated resource volumes and grades,
permitting and infrastructure, external factors affecting the
project, as well as the likelihood of on-going funding from current
or potential JV partners. In the event that a licence does not
represent an economic exploration target and results indicate that
there is no additional upside, or that future funding from JV
partners is unlikely, a decision will be made to discontinue
exploration. A further review of the recommendations of the
consultant or senior Company geologist is then performed by
management.
Royalty assets are recognised at cost upon acquisition. Those
assets denominated in a currency other than the functional currency
are revalued at the end of the year. Each royalty asset is the
subject of a plan for the units of production over the life of the
mine either at the point of acquisition or at the commencement of
mining activity. Amortisation of the asset is based on the units of
production recorded in the period.
At
1 January Disposals At 31 December
2021 Additions & impairment 2021
Group GBP GBP GBP GBP
Royalty assets
Australia
Ballarat - 4,690,652 - 4,690,652
South Kalgoorlie (SKO) - 2,542,031 - 2,542,031
Exploration Royalties (AER) - 310,189 - 310,189
Côte d'Ivoire
Bonikro - 7,556,123 - 7,556,123
----------------------------- ----------- ----------- -------------- ---------------
Total royalty assets - 15,098,995 - 15,098,995
----------------------------- ----------- ----------- -------------- ---------------
Exploration assets
Mali
Korali Sud (Diba) 1,344,579 1,085 - 1,345,664
Lakanfla 582,930 6,568 (589,498) -
Tabakorole 614,666 - (614,666) -
Pitiangoma Est 569,777 - (569,777) -
Egypt
Wadi Jundi 16,723 162,994 - 179,717
Gabal Al Shaluhl 8,362 81,755 - 90,117
Gabal Om Ourada 8,362 80,980 - 89,342
Wadi Dubur 4,181 41,007 - 45,188
Cameroon
Laboum 54,159 8,060 - 62,219
Bikoula 51,103 8,529 - 59,632
Ndjele 11,979 4,181 - 16,160
Ethiopia
Daro 1,070 1,151 - 2,221
Zager 2,892 284 - 3,176
Morocco
Agdz 4,644 1,443 (6,087) -
Takzim 616 - (616) -
New "Black Permits" - 14,079 (14,079) -
Côte d'Ivoire
Toura (application) 1,338 - - 1,338
----------------------------- ----------- ----------- -------------- ---------------
Total exploration assets 3,277,381 412,116 (1,794,723) 1,894,774
----------------------------- ----------- ----------- -------------- ---------------
Total intangible assets 3,277,381 15,511,111 (1,794,723) 16,993,769
----------------------------- ----------- ----------- -------------- ---------------
At
1 January Disposals At 31 December
2020 Additions & impairment 2020
Group GBP GBP GBP GBP
Exploration assets
Mali
Korali Sud (Diba) 1,336,143 8,436 - 1,344,579
Lakanfla 582,930 - - 582,930
Tabakorole 582,908 31,758 - 614,666
Pitiangoma Est 569,777 - - 569,777
Egypt
Wadi Jundi - 16,723 - 16,723
Gabal Al-Shaluhl - 8,362 - 8,362
Gabal Om Ourada - 8,362 - 8,362
Wadi Dubur - 4,181 - 4,181
Cameroon
Laboum 46,445 7,714 - 54,159
Bikoula 43,056 8,047 - 51,103
Ndjele 8,313 3,666 - 11,979
Ethiopia
Tigray-Afar 16,495 659 (17,154) -
Daro 1,070 - - 1,070
Zager 2,481 411 - 2,892
Morocco
Agdz 4,644 - - 4,644
Takzim 616 - - 616
Côte d'Ivoire
Prikro 2,936 - (2,936) -
Toura (application) 1,338 - - 1,338
Liberia
Zolowo 3,798 - (3,798) -
3,202,950 98,319 (23,888) 3,277,381
--------------------- ----------- ---------- -------------- ---------------
19 Property, plant and equipment
Property, plant and equipment are initially measured at cost and
subsequently measured at cost or valuation, net of depreciation and
any impairment losses. Depreciation is recognised so as to write
off the cost or valuation of assets less their residual values over
their useful lives on the following bases:
Fixtures, fittings and equipment 4 years straight line
Computer equipment 2 years straight line
Plant and machinery 4 years straight line
Motor vehicles 2 years straight line
The gain or loss arising on the disposal of an asset is
determined as the difference between the sale proceeds and the
carrying value of the asset, and is recognised in profit or
loss.
Impairment of non-current assets
At each reporting end date, the Group reviews the carrying
amounts of its non-current assets to determine whether there is any
indication that those assets have suffered an impairment loss. If
any such indication exists, the recoverable amount of the asset is
estimated in order to determine the extent of the impairment loss
(if any). Where it is not possible to estimate the recoverable
amount of an individual asset, the Group estimates the recoverable
amount of the cash-generating unit to which the asset belongs. The
recoverable amount is the higher of fair value less costs to sell
and value in use. In assessing value in use, the estimated future
cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset for which the
estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (or cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised immediately in
profit or loss, unless the relevant asset is carried at a revalued
amount, in which case the impairment loss is treated as a
revaluation decrease.
Plant and Fixtures, Computer Motor vehicles Total
machinery fittings equipment
and equipment
Group GBP GBP GBP GBP GBP
----------------------------- ----------- --------------- ----------- --------------- --------
Cost
At 1 January 2021 795 44,729 25,891 67,553 138,968
Additions - 19,365 13,639 - 33,004
Disposals - (252) (6,816) - (7,068)
----------------------------- ----------- --------------- ----------- --------------- --------
At 31 December 2021 795 63,842 32,714 67,553 164,904
Amortisation and impairment
At 1 January 2021 608 44,621 21,466 67,553 134,248
Charge in the year 139 1,383 5,820 - 7,342
Disposals - (252) (6,816) - (7,068)
----------------------------- ----------- --------------- ----------- --------------- --------
At 31 December 2021 747 45,752 20,470 67,553 134,552
Carrying amount
----------------------------- ----------- --------------- ----------- --------------- --------
At 31 December 2020 187 108 4,425 - 4,720
At 31 December 2021 48 18,090 12,244 - 30,382
----------------------------- ----------- --------------- ----------- --------------- --------
Plant and Fixtures, Computer Motor vehicles Total
machinery fittings equipment
and equipment
Group GBP GBP GBP GBP GBP
----------------------------- ----------- --------------- ----------- --------------- --------
Cost
At 1 January 2020 795 44,949 25,364 67,553 138,661
Additions - - 5,310 - 5,310
Disposals - (220) (4,783) - (5,003)
----------------------------- ----------- --------------- ----------- --------------- --------
At 31 December 2020 795 44,729 25,891 67,553 138,968
Amortisation and impairment
At 1 January 2020 469 44,691 22,758 67,553 135,471
Charge in the year 139 150 3,491 - 3,780
Disposals - (220) (4,783) - (5,003)
----------------------------- ----------- --------------- ----------- --------------- --------
At 31 December 2020 608 44,621 21,466 67,553 134,248
Carrying amount
----------------------------- ----------- --------------- ----------- --------------- --------
At 31 December 2019 326 258 2,606 - 3,190
At 31 December 2020 187 108 4,425 - 4,720
----------------------------- ----------- --------------- ----------- --------------- --------
Where an impairment loss subsequently reverses, the carrying
amount of the asset (or cash-generating unit) is increased to the
revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognised
for the asset (or cash-generating unit) in prior years. A reversal
of an impairment loss is recognised immediately in profit or loss,
unless the relevant asset is carried at a revalued amount, in which
case the reversal of the impairment loss is treated as a
revaluation increase.
20 Subsidiaries
Interests in subsidiaries, associates and jointly controlled
entities are initially measured at cost and subsequently held at
fair value. As there is no active market, fair value is considered
to be amortised cost less impairments. This is a Level 2 valuation
under IFRS 13. The investments are assessed for impairment at each
reporting date and any impairment losses or reversals of impairment
losses are recognised immediately in profit or loss. None of the
non-controlling interests is material to the group.
Company
2021 2020
GBP GBP
-------------- ---------- ----------
At 1 January 4,608,930 4,608,930
Additions - -
Disposals - -
-------------- ---------- ----------
4,608,930 4,608,930
----------------- ---------- ----------
Altus Strategies plc has direct investments in the following
subsidiary undertakings.
Name of undertaking Incorporated % Holding Principal activity
----------------------------- ------------- ---------- ------------------------
Altus Exploration Management UK 100.00 Business support
Limited(1) services
Altus Royalties Limited(1) UK 100.00 Royalty holding company
Altus Royalties Holdings UK 100.00 Holding company
Limited(1)
LGN Holdings (BVI) Inc(11) BVI 100.00 Holding company
----------------------------- ------------- ---------- ------------------------
Altus Strategies plc is the ultimate parent but not the
immediate parent of the following subsidiary undertakings.
Name of undertaking Incorporated % Holding Principal activity
------------------------------ ------------- ---------- -----------------------
Aeos Gold Limited(1) UK 100.00 Gold exploration
Auramin Limited(1) UK 99.00 Gold exploration
Aluvance Limited(1) UK 97.26 Iron ore exploration
Akh Gold Holdings Limited(1) UK 100.00 Holding company
Akh Gold Limited(1) UK 100.00 Bauxite exploration
Altau Resources Limited(1) UK 100.00 Copper exploration
Aterian Resources Limited(1) UK 100.00 Mineral exploration
Oxford Mining Club Limited(1) UK 50.00 Events
Altus Royalties Australia UK 100.00 Royalty holding
Limited(1) company
Altus Royalties Mauritius UK 100.00 Royalty holding
Limited(1) company
Akh Gold Limited (branch)(13) Egypt 100.00 Gold exploration
Altau Resources Limited(2) Ethiopia 100.00 Copper exploration
Aucam SA(5) Cameroon 97.26 Iron ore exploration
Valnord SA(5) Cameroon 99.00 Gold exploration
Mining & Exploration Services Liberia 99.00 Gold exploration
Limited(6)
Azru Resources SARL AU(8) Morocco 100.00 Copper exploration
Allegra Gold Mali SARL(12) Mali 100.00 Gold exploration
Avalon Gold Mali SARL(12) Mali 100.00 Gold exploration
LGC Exploration Mali SARL(12) Mali 100.00 Gold exploration
LGC Piti SARL(12) Mali 100.00 Gold exploration
------------------------------ ------------- ---------- -----------------------
The following are dormant subsidiaries.
Name of undertaking Incorporated % Holding Principal activity
--------------------------------- ------------- ---------- -------------------
Altaucam Resources Limited(3) Seychelles 100.00 Dormant
Altau Holdings Limited(3) Seychelles 100.00 Dormant
Avance African Group Limited(3) Seychelles 97.26 Dormant
Aucam Resources Limited(3) Seychelles 97.26 Dormant
Inland Exploration Limited(3) Seychelles 100.00 Dormant
Westcoast Exploration Limited(3) Seychelles 100.00 Dormant
Mansion Resources Limited(3) Seychelles 99.00 Dormant
Altar Resources Limited(3) Seychelles 99.00 Dormant
Eagle Resources Limited(3) Seychelles 99.00 Dormant
Enigma Resources Limited(3) Seychelles 99.00 Dormant
Atlas Minerals(3) Seychelles 100.00 Dormant
Atlantic Minerals(3) Seychelles 100.00 Dormant
Alboran Minerals(3) Seychelles 100.00 Dormant
Addax Minerals(3) Seychelles 100.00 Dormant
Akkari Minerals(3) Seychelles 100.00 Dormant
Aures Minerals(3) Seychelles 100.00 Dormant
Azilal Minerals(3) Seychelles 100.00 Dormant
Altus Diamonds(3) Seychelles 100.00 Dormant
Avanor SARL(4) Côte 97.26 Dormant
d'Ivoire
Avanex SARL(4) Côte 97.26 Dormant
d'Ivoire
Bauxex SA(5) Cameroon 97.26 Dormant
Adrar Resources SARL AU(7) Morocco 100.00 Dormant
Altus Mining (SL)(9) Sierra Leone 100.00 Dormant
Apalex Sarl(4) Côte 100.00 Dormant
d'Ivoire
Aza Minerals Sarl(7) Morocco 100.00 Dormant
Akassori(10) Chad 100.00 Dormant
Legend Mali (BVI) II Inc(11) BVI 100.00 Dormant
Legend Mali (BVI) III Inc(11) BVI 100.00 Dormant
Legend Mali (BVI) IV Inc(11) BVI 100.00 Dormant
Legend Mali (BVI) V Inc(11) BVI 100.00 Dormant
Legend Mali (BVI) VI Inc BVI 100.00 Dormant
(11)
Akh Gold I Limited (1) UK 100.00 Dormant
Akh Gold II Limited (1) UK 100.00 Dormant
Akh Gold III Limited (1) UK 100.00 Dormant
Akh Gold IV Limited (1) UK 100.00 Dormant
Akh Gold V Limited (1) UK 100.00 Dormant
Akh Gold VI Limited (1) UK 100.00 Dormant
Legend Gold Limited (1) UK 100.00 Dormant
Legend Mali (UK) II Limited UK 100.00 Dormant
(1)
Legend Mali (UK) III Limited UK 100.00 Dormant
(1)
--------------------------------- ------------- ---------- -------------------
The following entities are held as joint operations.
Name of undertaking Incorporated % Holding Principal activity
---------------------------- ------------- ---------- -------------------
Minera Tercero SpA(14) Seychelles 50.00 Royalty holding
company
Alpha 2 SPV Limited(15) Seychelles 50.00 Royalty holding
company
Alpha 3 SPV Limited(15) Seychelles 80.01 Royalty holding
company
Alcrest Royalties Australia Seychelles 50.00 Royalty holding
(Pty) Ltd(16) company
---------------------------- ------------- ---------- -------------------
As at 1 April 2021, a controlling interest in Legend Mali (UK) I
Limited and its subsidiary Legend Gold Mali SARL passed to the
Company's joint venture partner, Marvel Gold Limited. There was no
consideration for the transfer, but Marvel Gold fulfilled various
exploration and expenditure milestone requirements under the terms
of the JV agreement covering the two licences. At 31 December 2021,
the Company held a 49% interest in Legend Mali (UK) I Limited. The
consolidated net assets derecognised on disposal of Legend Mali
(UK) I Limited as a subsidiary were as follows.
Net assets
GBP
-------------------------------- -----------
Intangible assets 1,204,164
Amounts due to related parties (324,603)
Cash and cash equivalents 31,466
-----------
911,027
-----------
Fair value of 49% share of
assets of associate 446,572
-----------
Loss on disposal of subsidiary (464,455)
-------------------------------- -----------
The fair value of the net assets was based on the value the
intangible assets and other assets and liabilities as recorded in
accordance with the Company's relevant policies. This constituted a
Level 2 valuation under IFRS 13.
The registered office addresses applying to the tables in this
note are as follows.
Registered office addresses
1. 1. 14 Station Road, Didcot, Oxfordshire OX11 7LL, United Kingdom
2. 2. Bole Sub-City, Kebele 08/09, House No. 811/A, P.O. Box 2633,
Addis Ababa, Ethiopia
3. 3. Suite 24, First Floor, Eden Plaza, Eden Island, Victoria,
PO Box 438, Mahé, Seychelles
4. 4. Cocody Les Deux Plateux, Rue des Jardins, Résidence
Aziz, Porte B, 20 BP 725 Abidjan 20, Côte d'Ivoire
5. 5. BP: 5405 Bastos, Dernier poteau, Yaoundé, Cameroon
6. 6. PO Box 10-3218, 1000 Monrovia 10, Liberia
7. 7. Appt 9, IMM 18, Rue Jbel Tazekka, Agdal, Rabat, 10090, Morocco
8. 8. 46, Avenue Oqba, Appt No. 2, Agdal, Rabat, Morocco
9. 9. 2, Berthan Macauley Street, Freetown, Sierra Leone
10. 10. Quartier Diguel Nord, N'Djamena, Chad
11. 11. MMG Trust (BVI) Corp, Pasea Estate, Road Town, Tortola,
British Virgin Islands
12. 12. Porte 608, Rue 136, Korofina Nord, Bamako, Mali
13. 13. 2(nd) Floor, Dorchester House, 4 Mohamed Abd Wahab St,
Zamalek, Cairo, Egypt
14. 14. Av. Andrés Bello 2711, Piso 8, 7550611, Las Condes,
Santiago, Chile
15. 15. 24th Floor, Al Sila Tower, Abu Dhabi Global Market Square,
Al Maryah Island, Abu Dhabi, United Arab Emirates
16. 16. 35 The Crescent, Vaucluse, NSW 2030, Australia
21 Investments in associates
During the year, the Company acquired an investment in associate
in relation to the purchase of an interest in the Caserones mining
royalty. In addition, there was a partial disposal of a Malian
subsidiary with a loss of management control which resulted in the
derecognition of the subsidiary and the recognition of an
investment in associate. Investments in associates are accounted
for using the equity method. The Company's share of
post-acquisition profit or loss is shown in the Statement of
Comprehensive Loss and distributions received from an associate
reduce the carrying amount of the investment.
These Company's investments in associates are as follows.
SLM California Legend Gold Total
Mali
2021 GBP GBP GBP
--------------------------- --------------- ------------ ------------
At 1 January - - -
Acquisition of investment 24,976,478 446,572 25,423,050
Share of profit 984,727 - 984,727
Dividend received (1,236,885) - (1,236,885)
Foreign exchange 195,705 - 195,705
At 31 December 24,920,025 446,572 25,366,597
--------------------------- --------------- ------------ ------------
SLM California
In August 2021, the Company acquired an interest in a net
smelter return ("NSR") royalty on the Caserones copper mine in
northern Chile. The royalty is payable to Sociedad Legal Minera
California Una de la Sierra Peña Negra ("SLM California"). In
conjunction with EMX Royalty Corp. of Canada, the Company
incorporated a 50:50 joint entity in Chile, Minera Tercero SpA
("Tercero"), to acquire 43% of the issued shares of SLM California
for US$68.2 million. SLM California holds a 1.94% NSR royalty on
the Caserones mine, giving the Company an effective royalty
interest of 0.418%. The acquisition value for the Company was
US$34.1 million structured as a 25% equity investment (US$8.5
million) and a 75% loan from the Group to Tercero (US$25.6
million).
The Company has determined that Tercero should be treated as
joint operation due to the fact that it has been designed by the
joint owners to be the recipient and distributor of funds arising
from the Caserones royalty. Therefore, the Company consolidates its
share of the assets, liabilities, equity and profit or loss of
Tercero. The Company has also determined that Tercero's 43%
ownership of SLM California and its right to appoint one director
to serve on the Board of SLM California does not give it control
but does give it significant influence.
During the year, Tercero received dividends from SLM California
in respect of the royalty on production at the Caserones mine
during Q2 2021 and Q3 2021 of 1,158 million Chilean pesos (US$1.4
million). A further dividend of 351 million pesos (US$0.4 million)
on production in the same quarter was paid to Tercero by SLM
California after the period end. The dividends were calculated
after provisions by SLM California for expenses and Chilean income
tax.
The royalty is treated as an intangible asset within the
individual financial statements of SLM California. An amortisation
charge is made against the royalty asset in respect of royalties
paid, and is based on the production data underlying the royalty
payment as a proportion of the lifetime expected production from
the mine.
Set out below is the unaudited summarised financial information
for SLM California. SLM California's financial statements are not
prepared under IFRS. The information below reflects the amounts
presented in the financial statements of SLM California adjusted
for differences in accounting policies between the Company and SLM
California, which includes the recognition and subsequent
amortisation of an intangible royalty asset.
2021
SLM California GBP
----------------------------------------- ------------
Summarised balance sheet at 31 December
2021
Non-current assets 112,924,511
Current assets 3,784,886
Current liabilities (3,648,362)
Non-current liabilities -
------------
Net assets 113,061,035
Summarised statement of comprehensive
income for the period of ownership
ending 31 December 2021
Royalty income 12,320,266
Profit before tax for the period 4,642,228
----------------------------------------- ------------
Legend Gold Mali
Legend Gold Mali SARL was a 100% owned subsidiary of the Company
that held the Lakanfla and Tabakorole gold exploration projects in
western and southern Mali respectively, and which was the subject
of a joint venture agreement between the Company and Marvel Gold.
Under terms of the agreement, Marvel Gold increased its ownership
of the company to 51% during 2021 following the completion of
specified exploration activities on the projects and the payment of
certain project stage fees. Both parties acknowledged that
management control of the company had passed to Marvel Gold as of
April 2021. Legend Gold Mali SARL was de-consolidated at that date
and subsequently equity accounted as an associate.
2021
Legend Gold Mali GBP
----------------------------------------- ------------
Summarised balance sheet at 31 December
2021
Non-current assets 7,858,478
Current assets 1,044,605
Current liabilities (8,899,984)
Non-current liabilities (1,818)
------------
Net assets 1,281
Summarised statement of comprehensive
income for the period of ownership
ending 31 December 2021
Profit before tax for the period -
----------------------------------------- ------------
Under Marvel Gold, all of the exploration expenditure made by
Legend Gold Mali is capitalised as an exploration asset.
22 Investments
The Group holds both financial assets at amortised cost and
financial assets at fair value through profit and loss. See note 28
for further information on the accounting policies applied to
financial assets.
Investments carried at fair value through profit or loss
comprise listed equity shares (IFRS 13 - Level 1). The fair value
of these equity shares is determined by reference to published
price quotations in an active market.
Group Company
2021 2020 2021 2020
GBP GBP GBP GBP
----------------------------- ---------- ---------- --------- ----------
At 1 January 1,320,542 302,072 413,635 208,953
Additions 617,579 1,180,838 - 71,839
Disposals - - - -
Revaluation gains/ (losses) (217,082) (162,368) (94,875) 132,842
----------------------------- ---------- ---------- --------- ----------
1,721,039 1,320,542 318,760 413,634
----------------------------- ---------- ---------- --------- ----------
23 Trade and other receivables
Trade receivables are amounts due from customers for goods sold
or services performed in the ordinary course of business. They are
generally due for settlement within 30 days and are therefore all
classified as current. Trade receivables are recognised initially
at the amount of consideration that is unconditional, unless they
contain significant financing components, in which case they are
recognised at fair value. The group holds the trade receivables
with the objective of collecting the contractual cash flows, and so
it measures them subsequently at amortised cost using the effective
interest method.
Trade receivables - credit risk
All trade receivables are denominated in GBP sterling and are
fully performing.
Fair value of trade receivables
The Directors consider that the carrying amount of trade and
other receivables is approximately equal to their fair value.
No significant receivable balances are impaired at the reporting
end date.
Group Company
2021 2020 2021 2020
GBP GBP GBP GBP
------------------------------------- --------- --------- ----------- -----------
Trade receivables - - - -
VAT recoverable 68,179 30,526 25,523 13,833
Amounts due from group undertakings - - 52,247,263 10,303,101
Amounts due from related parties 32,832 33,366 - -
Prepayments 90,541 63,089 70,076 58,125
Accrued income - 5,919 - -
Accrued other income from
receipt of shares 45,475 617,579 45,475 -
R&D tax credit 218,532 100,288 - -
Bid bonds on Egyptian licences 161,246 - - -
Other receivables 5,359 2,862 - -
------------------------------------- --------- --------- ----------- -----------
622,164 853,629 52,388,337 10,375,059
------------------------------------- --------- --------- ----------- -----------
24 Held-for-sale assets
Assets are classified as held for sale if their carrying amount
will be recovered principally through a sale transaction rather
than through continuing use and a sale is considered highly
probable. They are measured at the lower of their carrying amount
or fair value less costs to sell. Assets and liabilities classified
as held for sale are presented separately in the balance sheet in
accordance with IFRS 5.
The Group has concluded agreements that include the transfer of
a number of its subsidiaries which have subsequently been
designated as held-for-sale. An agreement made on 21 November 2021
provided for the transfer to Eastinco of UK-incorporated Aterian
Resources Limited, its Seychelles subsidiary, Atlantic Minerals
Limited, its Moroccan subsidiaries, Azru Resources SARL AU and
Adrar Resources SARL AU and the Group's portfolio of exploration
licences in Morocco including the Agdz licence. An agreement of
February 2019 provided for the transfer to Canyon of the Group's
Seychelles subsidiary, Aucam Resources Ltd, its Cameroon
subsidiary, Aucam SA, and the Group's Birsok exploration licence in
Cameroon.
2021 2020
GBP GBP
-------------------------------- --------- ---------
Current assets
Intangible assets 117,967 85,967
Cash and cash equivalents - 798
117,967 86,765
Current liabilities
Amounts due to related parties (34,020) (34,020)
-------------------------------- --------- ---------
25 Trade and other payables
Trade payables are recognised initially at fair value, and
subsequently measured at amortised cost using the effective
interest method. Liabilities arising from a lease are initially
measured on a present value basis. Lease payments to be made under
reasonably certain extension options are also included in the
measurement of the liability.
Group Company
2021 2020 2021 2020
GBP GBP GBP GBP
------------------------- ---------- ---------- ------------ --------
Current liabilities
Trade payables 499,156 291,843 17,542 38,266
Amounts due to group
undertakings - - 2,355,349 111,533
Amounts due to related
parties 69,192 59,034 69,192 -
Accruals and deferred
income 376,954 772,232 160,185 178,605
Lease liabilities
(IFRS 16) 40,945 20,065 - -
Other payables - 1,580 - -
------------------------- ---------- ---------- ------------ --------
986,247 1,144,754 2,602,268 328,404
Non-current liabilities
Lease liabilities
(IFRS 16) 64,671 45,848 - -
------------------------- ---------- ---------- ------------ --------
1,050,918 1,190,602 2,602,268 328,404
------------------------- ---------- ---------- ------------ --------
26 Borrowings
During the year, the Company drew down the full value of a
US$29.0 million acquisition loan facility provided by its
shareholder LMH Explorers S.à r.l. Funds were used primarily to
complete the acquisition of the Caserones royalty. Before the end
of the year, US$5.0 million of the loan principal was repaid. Under
its original terms, the facility bore annualised interest at a rate
of 7% plus three-month USD LIBOR for the first three months and 9%
plus three-month USD LIBOR thereafter, and was repayable by 17
February 2022. After the year end, the facility was extended to 30
June 2022 with interest at 10% plus three-month USD LIBOR. The
outstanding liability on the loan was GBP18,348,516 at 31 December
2021. The facility is senior secured against the shares of Altus
Royalties Limited, the material asset of which is the Company's 50%
shareholding in the Chilean SPV, Tercero.
2021
GBP
-------------------------------------------- --------------------------
Loan from related party 21,068,997
Loan repayment (3,761,762)
Interest charges 613,905
Foreign exchange revaluation 427,376
-------------------------------------------- --------------------------
18,348,516
-------------------------------------------- --------------------------
27 Provisions
Provisions are recognised when the Group or Company has a legal
or constructive present obligation as a result of a past event and
the Company judges that it is probable that it will be required to
settle that obligation, and a reliable estimate can be made of the
amount of the obligation.
The amount recognised as a provision is the best estimate of the
consideration required to settle the present obligation at the
reporting end date, taking into account the risks and uncertainties
surrounding the obligation. Where a provision is measured using the
cash flows estimated to settle the present obligation, its carrying
amount is the present value of those cash flows.
Group Company
2021 2020 2021 2020
GBP GBP GBP GBP
------------ ------- ----------- ----- -------------
Provisions 15,000 15,000 - -
------------ ------- ----------- ----- -------------
All provisions are expected to be settled within 12 months of
the reporting date.
A provision has been recognised in accordance with IAS 37 in
respect of the company's obligation to its landlord for
dilapidations on the expiry of its lease. The provision has been
recognised because there is an obligation at the reporting date as
a result of an onerous contract, where outflow is probable to
settle the obligation and a reliable estimate can be made.
28 Financial instruments
The Group's financial instruments and their respective
accounting policies are as follows.
Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits held
at call with banks and bank overdrafts. Bank overdrafts are shown
within borrowings in current liabilities.
Financial assets
Financial assets are recognised in the statement of financial
position when the Group or Company becomes party to the contractual
provisions of the instrument.
Financial assets are classified into specified categories. The
classification depends on the nature and purpose of the financial
assets and is determined at the time of recognition. Financial
assets are measured at either amortised cost or at fair value
through profit or loss.
Financial assets at fair value through profit or loss are
classified as current assets if expected to be settled within 12
months, otherwise they are classified as non-current.
Trade receivables, loans and other receivables that have fixed
or determinable payments that are not quoted in an active market
are held at amortised cost. Loans and receivables are measured at
amortised cost using the effective interest method, less any
impairment.
Interest is recognised by applying the effective interest rate,
except for short-term receivables when the recognition of interest
would be immaterial. The effective interest method is a method of
calculating the amortised cost of a debt instrument and of
allocating the interest income over the relevant period. The
effective interest rate is the rate that exactly discounts
estimated future cash receipts through the expected life of the
debt instrument to the net carrying amount on initial
recognition.
Impairment of financial assets
Financial assets, other than those at fair value through profit
or loss, are assessed for indicators of impairment at each
reporting end date. For loans and receivables, the amount of the
loss is measured as the difference between the asset's carrying
amount and the present value of estimated future cash flows.
Financial assets are impaired where there is objective evidence
that, as a result of one or more events that occurred after the
initial recognition of the financial asset, the estimated future
cash flows of the investment have been affected.
Derecognition of financial assets
Financial assets are derecognised only when the contractual
rights to the cash flows from the asset expire, or when it
transfers the financial asset and substantially all the risks and
rewards of ownership to another entity.
Financial liabilities
Financial liabilities are classified as either financial
liabilities at fair value through profit or loss or other financial
liabilities.
Other financial liabilities
Other financial liabilities, including borrowings, are initially
measured at fair value, net of transaction costs. They are
subsequently measured at amortised cost using the effective
interest method, with interest expense recognised on an effective
yield basis.
The effective interest method is a method of calculating the
amortised cost of a financial liability and of allocating interest
expense over the relevant period. The effective interest rate is
the rate that exactly discounts estimated future cash payments
through the expected life of the financial liability to the net
carrying amount on initial recognition.
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the
company's obligations are discharged, cancelled, or they
expire.
Equity instruments
Equity instruments issued by the company are recorded at the
proceeds received, net of direct issue costs.
The Group's financial assets are recorded as follows.
2021 2021 2020 2020
Assets at amortised Assets at Assets at Assets
cost FVPL amortised at FVPL
cost
Group GBP GBP GBP GBP
----------------------------- -------------------- ---------- ----------- ----------
Investments - 1,721,039 - 1,320,542
Cash and cash equivalents 6,355,011 - 5,937,486 -
Trade and other receivables 531,620 - 790,540 -
----------------------------- -------------------- ---------- ----------- ----------
6,886,631 1,721,039 6,728,026 1,320,542
----------------------------- -------------------- ---------- ----------- ----------
The Company's financial assets are recorded as follows.
2021 2021 2020 2020
Assets at amortised Assets at Assets at Assets
cost FVPL amortised at FVPL
cost
Company GBP GBP GBP GBP
------------------- ---------- -----------
Investments - 318,760 - 413,634
Investments in subsidiaries 4,608,930 - 4,608,930 -
Cash and cash equivalents 2,273,965 - 460,131 -
Trade and other receivables 52,318,261 - 10,316,934 -
------------------- ---------- -----------
59,201,156 318,760 15,385,995 413,634
------------------- ---------- -----------
The Group and Company have the following financial
liabilities.
2021 2020
Liabilities at Liabilities
amortised cost at amortised
cost
Group GBP GBP
Trade and other payables 1,050,918 1,190,602
Borrowings 18,348,516 -
19,399,434 1,190,602
Company GBP GBP
Trade and other payables 2,602,268 328,404
Borrowings 18,348,516 -
20,950,783 328,404
29 Financial risk management
The Group's activities expose it to a variety of financial
risks: credit risk, liquidity risk, price risk and interest rate
risk. The Group's overall risk management programme focuses on the
unpredictability of financial markets and seeks to minimise
potential adverse effects on the Groups financial performance. The
Group has substantially renewed its risk management processes
during the year to take account of new risks arising from the
acquisition of cash-paying royalties which affect several areas of
risk as outlined below.
Market risk
The Group's activities potentially expose it to market risks,
which is the risk that the fair value of future cash flows of a
financial instrument will fluctuate because of changes in market
prices. Market risks arise from open positions in interest rate and
foreign currency risk, all of which are exposed to general and
specific market movements and changes in the level of volatility of
market rates or prices such as interest rates and foreign exchange
rates.
Foreign exchange risk
The Group operates internationally and is exposed to foreign
exchange risk arising from holding cash in various currencies. The
Group's functional currency is pound sterling, its royalty income
is in US dollars and Australian dollars and its major purchases are
transacted in pounds sterling, US dollars, West African francs,
Egyptian pounds, Ethiopian birr and Moroccan dirham. The Group's
head office expenditures are mainly incurred in pounds sterling and
the majority of its exploration costs are incurred in the local
African currencies. When funds are received a cashflow forecast is
prepared by currency to identify the anticipated currency
transactions that will be required over the period that the funds
are expected to be used. FX transactions are undertaken at the
earliest opportunity to minimise currency risk. For the year ended
31 December 2021, the Group had an exchange loss of GBP271,183
(2020: GBP328,790 loss) which was not considered material to its
operations.
Credit risk
Credit risk is the risk of suffering financial loss should the
Group's customers, clients or counterparties fail to fulfil their
contractual obligations to the Group. The Group's holding of
cash-paying mining royalty interests expose it to the risk that
mine operators will not fulfil their contractual obligations to
make royalty payments to the Group. The Group will mitigate this
risk by continually engaging with mine operators, visiting
producing mines where possible and by obtaining regular operational
and financial information with respect to the mines themselves and
the operating companies.
With respect to its exploration activities, the Group undertakes
due diligence on new suppliers and seeks to use respected suppliers
within the industry. With respect to the Group's cash balances,
risk is mitigated by depositing surplus cash with financial
institutions with acceptable credit ratings in accordance with the
Group's treasury management policies. The carrying value of
financial assets approximates their fair value and the maximum
exposure as at the Statement of Financial Position date is outlined
in the following table.
2021 2020
Group GBP GBP
Trade receivables - -
Other receivables 5,356 2,862
R&D tax credit 218,532 100,288
VAT recoverable 68,179 30,526
Amounts due from related parties 32,832 33,366
Prepayments 90,541 63,089
Accrued income - 5,919
Accrued other income from receipt
of shares 45,475 617,579
Cash and cash equivalents 6,355,011 5,937,4866
Deposits 161,246 -
Held-for-sale assets 117,967 86,765
7,095,139 6,877,880
Commodity price risk
The Group's principal activity is the acquisition and generation
of mining royalty interests. During the year, it acquired its first
cash paying royalties. The Group is therefore exposed to commodity
price risk in the valuation of the royalties it receives, and in
the effect that a change in commodity prices may impact the
viability of continued operations at a mine on which it holds a
royalty. In addition, changes in commodity prices may impact the
economic assessment of the exploration projects in which it holds
an interest, which may restrict the availability of future finance
for the project. The Group therefore maintains a diversified
portfolio of both royalties and exploration licences, covering a
range of nine base and precious metals including gold, silver,
copper and nickel, in order to mitigate the risk of changes in the
prices of individual metals.
Liquidity risk
Liquidity risk is the risk that the Group is unable to meet its
payment obligations associated with its financial liabilities when
they fall due. Prudent liquidity risk management is achieved by
maintaining sufficient cash balances and the availability of
funding through an adequate amount of committed credit facilities.
The Group manages liquidity by maintaining sufficient cash with
banks to meet its changing commitments. The Group's objective is to
ensure that there are sufficient committed financial resources to
meet its current obligations and its future business requirements
for a minimum of twelve months. Details of the Company's loan
liability are included in note 1 and in the Financial Review on
pages 29-30.
The table below presents the cash flows payable by the Group
under remaining contractual maturities at the Statement of
Financial Position date. The amounts disclosed in the table are the
contractual undiscounted cash flows. The carrying values of
financial liabilities approximates their fair values.
Up to 3 3 to 12 Over 12
months months months Total
2021 GBP GBP GBP GBP
------- -----------
Trade payables 499,156 - - 499,156
Borrowings 18,348,516 - - 18,348,516
Related parties 69,192 - - 69,192
Lease payables 10,503 30,443 64,671 105,617
Accruals and deferred
income 376,953 - - 376,953
Provisions - - 15,000 15,000
Held-for-sale liabilities 34,020 - - 34,020
------- -----------
19,338,340 30,443 79,671 19,448,454
------- -----------
Up to 3 3 to 12 Over 12
months months months Total
2020 GBP GBP GBP GBP
------- -----------
Trade payables 291,843 - - 291,843
Related parties 59,034 - - 59,034
Lease payables 4,841 15,224 45,848 65,913
Other payables 1,580 - - 1,580
Accruals and deferred
income 772,232 - - 772,232
Provisions - - 15,000 15,000
Held-for-sale liabilities 34,020 - - 34,020
------- -----------
1,163,550 15,224 60,848 1,239,622
------- -----------
Interest rate risk
Interest rate risk is the possibility that changes in interest
rates will result in higher financing costs or reduced income from
the Group's interest-bearing financial assets and liabilities. The
Group's debt is restricted to the loan facility provided by its
significant shareholder, La Mancha, which attracts a fixed rate of
interest and is due for repayment by 30 June 2022. Altus has
received a number of proposals from recognised lenders to refinance
the existing facility. The Group seeks to manage interest rate risk
by reducing the level of debt in the short term, by restructuring
debt with fixed rates of interest over a longer term and by
minimising the amount of debt it takes on to finance royalty
acquisitions.
30 Retirement benefit schemes
Payments to defined contribution retirement benefit schemes are
charged as an expense as they fall due. For those employees that
pay into a Self-Invested Personal Pension scheme, the Company
matches their contributions up to an agreed salary percentage. At
31 December 2021, unpaid employer's pension liabilities stood at
GBP6,344 (2020: GBP16,732) of which GBP3,209 was for Executive
Directors (2020: GBP3,959).
2021 2020
Defined contribution scheme GBP GBP
-------
Charge for the year 78,161 45,924
-------
31 Share based payments
On 20 August 2021, the Company granted to employees and
consultants options to acquire 575,000 Ordinary Shares. There were
no performance conditions attached to these options, and the grant
included both EMI and non-EMI options. Options are measured at fair
value at the date of grant. The basic assumptions that feed into
both models are volatility of the share price, annual risk free
rate and dividend yield. Volatility is estimated using the average
daily share price from the previous three years, the risk free rate
is based on the Bank of England's yield curve tables, and it is
assumed no dividend will be paid over the life of the option. This
is a Level 1 valuation under IFRS 13. The vesting terms of the
options granted in August 2021 vary between immediate, 12 months
and 18 months from the date of grant, subject to the employee
completing a corresponding service period, and they expire after
five years. The exercise price is the mid-market value of Altus
Strategies plc's Ordinary Shares on the day prior to the original
grant of options under the scheme in August 2020 plus a 10%
premium. Options are fair valued at grant date using the
Black-Scholes model, and expensed over the vesting period.
Movements in the number of options outstanding and their related
weighted average exercise prices were as follows.
2021 2020
Ordinary Weighted average Ordinary Weighted average
Shares issuable exercise price Shares issuable exercise price
under options (p) under options (p)
At 1 January 5,100,000 73.15 - -
Granted 575,000 73.15 5,100,000 73.15
At 31 December 5,675,000 73.15 5,100,000 73.15
Of the options to purchase 5,675,000 Ordinary Shares which were
outstanding at 31 December 2021, 3,200,000 were exercisable. The
weighted average exercise price of the exercisable options was
73.15p. Of the outstanding options, 5,100,000 will expire in 2025
and 575,000 will expire in 2026.
The fair value of options granted during the year, as calculated
using the Black Scholes model, was 26.51p (2020: 31.50p). The
significant inputs into the model were as follows.
2021 2020
-------- --------
Weighted average share price at
grant date 62.00p 66.50p
Exercise price 73.15p 73.15p
Weighted average expected volatility 60% 60%
Weighted average risk free rate 0.00% 0.00%
Dividend yield 0.00% 0.00%
Weighted average expected life 5 years 5 years
-------- --------
During the year warrants to purchase 63,065 Ordinary Shares were
issued (2020: nil), 33,266 warrants were exercised (2020: nil) and
149,106 warrants expired (2020: nil). Warrants issued during the
year have an exercise price of GBP1.125 and expire after two years.
Outstanding warrants carried through the year relate to the private
placement undertaken in combination with the Company's listing on
the TSX-V in April 2018, under which each new share entitled the
subscriber to one warrant, exercisable for five years, to purchase
one Ordinary Share at a C$1.50 exercise price. These warrants were
not valued using the Black Scholes model as the full value paid was
attributed to the associated shares.
Details of the warrants outstanding at the end of the year are
as follows.
2021 2020
Ordinary Weighted Ordinary Weighted
Shares issuable average exercise Shares issuable average exercise
under warrants price (GBP) under warrants price (GBP)
Outstanding as at
1 January 5,660,695 0.864 28,303,477 0.173
Consolidation 5:1 - - (22,642,782) -
Granted 63,065 1.125 - -
Expired (149,106) 0.653 - -
Exercised (33,266) 0.648 - -
Outstanding as at
31 December 5,541,388 0.880 5,660,695 0.864
Exercisable at 31
December 5,541,388 0.880 5,660,695 0.864
---------------- ----------------- ---------------- -----------------
Both the warrants granted during the year and the warrants
carried throughout the year expire in 2023.
The fair value of warrants granted during the year, as
calculated using the Black Scholes model, was 15.80p per warrant.
The significant inputs into the model were as follows.
2021
--------
Weighted average share price at
grant date 75.00p
Weighted average exercise price 112.50p
Weighted average expected volatility 60%
Weighted average risk free rate 0.00%
Dividend yield 0.00%
Weighted average expected life 2 years
--------
The total share-based payment expense recognised in the
Statement of Comprehensive Income was GBP982,041 (2020: GBP663,945)
of which GBP978,178 (2019: GBP603,943) was in respect of director
and employee share options and GBP3,893 was in respect of the issue
of warrants.
The balance of the share based payment reserve was as
follows.
2021 2020
GBP GBP
----------
Balance at 1 January 631,399 27,456
Options granted during the year 978,178 603,943
Warrants granted during the year 3,863 -
Balance at 31 December 1,613,440 631,399
----------
32 Share capital and share premium
Share capital and share premium include Ordinary Shares in Altus
Strategies plc issued to shareholders and warrants and options that
have been exercised.
Number of shares Ordinary Share
* share capital premium
Company GBP GBP
-------------------- ----------------
At 1 January 2020 210,228,461 2,102,284 7,378,369
Issue of new shares (pre-consolidation) 140,229,389 1,402,294 5,843,746
Consolidation 5:1 (280,366,280) - -
Issue of new shares (post
consolidation) 31 2 -
-------------------- ----------------
At 31 December 2020 70,091,601 3,504,580 13,222,115
-------------------- ----------------
Issue of new shares 47,196,811 2,359,841 24,313,586
Exercise of warrants 33,266 1,663 19,907
At 31 December 2021 117,321,678 5,866,084 37,555,608
* All shares have been issued, authorised and fully paid
33 Leases
The group holds two leases that it accounts for under IFRS 16,
which were signed in January 2019 and September 2021. To determine
the split between principal and interest in the lease the Company
applied an estimate of the interest it would have to pay in order
to finance payments under the new lease. This method was adopted as
the Company was not able to ascertain the implied interest rate and
did not have borrowings to use as a benchmark. It is in line with
the interest rates charged on its acquisition loan facility
obtained during the year. The impact of the estimate is currently
considered to be immaterial to the financial statements, but the
Directors will review this approach as appropriate. Other leases
are either small in value or cover a period of less than 12
months.
2021 2020
GBP GBP
For the year
Cash outflow 28,850 24,500
Capital paid 23,310 18,198
Interest paid 5,540 6,302
Depreciation charge 24,200 20,064
Interest charge 5,540 6,302
At 31 December 2021
Right-of-use asset
At 1 January 60,196 80,262
Additions 67,675 -
Depreciation (24,200) (20,064)
At 31 December 103,671 60,198
Lease liability
Less than 12 months 40,945 20,065
Greater than 12 months 64,671 45,848
Total lease liability 105,616 65,913
Lease liabilities are included in trade and other payables as
shown in note 25.
Rent payable under operating leases, less any lease incentives
received, is charged to administrative expenses on a straight-line
basis over the term of the relevant lease except where another more
systematic basis is more representative of the time pattern in
which economic benefits from the lease asset are consumed.
At the reporting date the group had outstanding commitments for
future minimum lease payments under non-cancellable operating
leases, on which the short-term exemption has been taken, which
fall due as follows.
2021 2020
Group GBP GBP
Within one year 11,483 4,587
Between 2 and 5 years 360 -
11,843 4,587
34 Related party transactions
For detail on Directors' remuneration in the year see the
Directors' Remuneration Report on pages 63-67 and in note 12.
Details of Directors' participation in the fundraises of March and
December 2021 are also included in the Directors' Remuneration
Report.
Seabord Services Corp. is a management services company that
provides to the Group the services of its adviser, David Miles, and
his administrative support team. Seabord provided similar services
to Legend Gold Corp. before its acquisition by the Group in January
2018, and David Miles was the Chief Financial Officer of the
Company until 1 July 2019 through a contract with Seabord. Michael
Winn, a non-executive director of the Group, is the sole
shareholder and a director of Seabord. The value of services
provided by Seabord in the year was GBP12,163 (2020: GBP53,386).
The amount payable to Seabord at the end of the year was GBP877
(2020: GBPnil).
EMX Royalty Corp. was the Company's strategic partner in the
acquisition of the Caserones NSR royalty. Michael Winn is the
chairman of EMX. During the year, EMX recharged costs relating to
the acquisition totalling GBP69,192 which were outstanding at the
end of the year (2020: GBPnil).
Canyon was a former JV partner of the Group in respect of the
Birsok project in Cameroon. One non-executive director of the
Group, David Netherway, is also a director of Canyon. The value of
services provided to Canyon during the year was GBPnil (2020:
GBPnil). The amount receivable from Canyon at the end of the year
was GBP43,501 (2020: GBP43,501).
The Aegis group of companies ("Aegis") comprises Aegis Holdings
Ltd, Aegis Asset Management Ltd, Aegis Asterion Ltd and Aegis
Exploration Management Ltd, and shares three directors with the
Group (Aegis Exploration Management Ltd two directors). The value
of costs recharged to Aegis during the year was GBP871 (2020:
GBP509). The amount payable to Aegis at the end of the year was
GBPnil (2020: GBP53,386 receivable), which included a short term
cash loan of GBP59,609 which was repaid on 12 February 2021.
During the year, La Mancha provided an acquisition loan facility
to the Group with a value of US$29 million. The amount drawn down,
and interest accrued, under the facility will be repayable on 30
June 2022. The facility bore annualised interest at a rate of the
three-month USD London Inter-bank Offered Rate ("LIBOR") plus 7%
for the first three months, and USD LIBOR plus 9% until the
original repayment date of 17 February 2022. It bears interest at
USD LIBOR plus 10% for the period to 30 June 2022. The facility is
senior secured against the shares of Altus Royalties Limited, the
only material asset of which is the shareholding in Minera Tercero
Tercero SpA. The facility incorporates an automatic prepayment
provision which applies to future cash proceeds from equity capital
raised by Altus. Interest is payable on a quarterly basis. No break
fees, early repayment fees or other fees are payable by Altus to La
Mancha, or to any other party, in connection with the facility. At
31 December 2021, La Mancha held a 35.08% interest in the Company
and the CEO of La Mancha, Karim Nasr, is a non-executive director
of the Company. The balance of the loan was GBP18,348,516 at 31
December 2021. After the end of the financial year, on 7 March
2022, Gérard de Hert Managing Director of Technical services at La
Mancha was appointed as a director of the Company.
35 Significant non-cash transactions
In August 2021 the Company granted 575,000 options to purchase
new Ordinary Shares in the Company at an exercise price of
GBP0.7315 per share to employees and consultants of the
Company.
During the year, warrants were issued for the purchase of 63,065
new Ordinary Shares of the Company at an exercise price of GBP1.125
per share to external third parties.
As at 1 April 2021, the Company recognised the loss of ownership
control of Legend Gold Mali SARL, which holds the Lakanfla and
Tabakorole projects, resulting from the completion of milestones
per the Joint Venture Agreement with Marvel Gold, and from that
date recognised a 49% share in Legend Gold Mali SARL as an
associate.
36 Capital commitments
At 31 December 2021, the Company had capital commitments of
GBP167,596 (2020: no material commitments).
37 Subsequent events
Project updates
The Company announced further significant gold intersections
from RC drilling at the Diba & Lakanfla gold project in western
Mali, following the completion of a 11,832m DD, RC and AC drilling
programme. RC results include 1.23 g/t Au over 127m from 21m and
0.90 g/t Au over 66m from 41m (not true widths) at the Lakanfla
Central Prospect and 8.74 g/t Au over 7m from 119m and 4.76 g/t Au
over 12m from 102m (not true widths) at the Diba NW Prospect. The
results extended the mineralised strike of Lakanfla Central by
approximately 200m to approximately 750m, with mineralisation
remaining open to the northeast and at depth.
On 12 April 2022, the Ministry of Energy Transition and
Sustainable Development of Morocco issued a 10-year mining licence
in respect of the Company's Agdz copper and silver project. The
project is part of a portfolio that will be vended to Eastinco
Mining and Exploration Plc, subject to Eastinco completing its
proposed admission to the London Stock Exchange Standard List.
On 19 April 2022, the Ministry of Mines, Energy and Water in
Mali issued a small-scale gold mining licence in respect of the
Company's 100% owned Korali Sud licence, containing the Diba gold
project located in western Mali. The licence and is valid for an
initial four year period, renewable for successive four year
periods, and there are no statutory minimum expenditure commitments
under the licence.
Investments
On 31 January 2022, the Company completed the second and final
closing of the acquisition of a portfolio of 24 royalties and
royalty interests from Newcrest Mining Ltd. The second close
covered royalties on nine development and exploration stage assets
in Australia for consideration from Altus of US$4.0m.
Joint venture
On 19 January 2022, the Company signed amended Joint Venture and
Earn-In Agreement ("JVA") with Marvel Gold, which replaces the
agreement signed on 17 June 2020. The new JVA comprises the
Tabakorole gold project and two contiguous gold licences for a
total of 292km(2) . Marvel holds a 70% equity interest in the
licences and retains the right to increase their holding to 80% by
sole funding a Definitive Feasibility Study on the licences. Altus
retains a 30% equity interest and a 2.5% NSR royalty on the
licences.
Sale of project
On 14 March 2022, the Company executed a Sale and Purchase
Agreement ("SPA") with Firering Strategic Minerals Plc ("Firering")
for the sale of the Company's Toura nickel-cobalt licence
application located in western Côte d'Ivoire. In consideration for
the project, Firering will grant the Company a Gross Revenue
Royalty of up to 1.0% on nickel and cobalt sales from the project
and pay the Company EUR15,000 in consideration.
Extension of loan facility
On 12 February 2022, the repayment date on the loan facility
provided to the Company by La Mancha was extended to 30 June 2022.
The annualised interest rate of the facility was increased from 9%
plus the USD London Inter-bank Offered Rate ("LIBOR") to 10% plus
USD plus LIBOR. All other provisions of the facility remained
unchanged.
**END**
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.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
FR UWAKRUKUSUAR
(END) Dow Jones Newswires
April 29, 2022 02:01 ET (06:01 GMT)
Altus Strategies (LSE:ALS)
Historical Stock Chart
From Mar 2024 to Apr 2024
Altus Strategies (LSE:ALS)
Historical Stock Chart
From Apr 2023 to Apr 2024
