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 May 2022 to Jun 2022 Click Here for more Altus Strategies Charts.
Altus Strategies (LSE:ALS)
Historical Stock Chart
From Jun 2021 to Jun 2022 Click Here for more Altus Strategies Charts.