Elemental Altus Royalties Delivers Strong Q3 Results, Positions for Growth

• Record revenue of $7.8 million in first 9 months of 2023, a 10% increase vs 2022.
• Adjusted revenue of $12.2 million in first 9 months, a 58% increase driven by royalty portfolio expansion.
• Record gold equivalent ounces (GEOs) of 6,187, up 47% over 2022.
• Record adjusted EBITDA of $7.8 million, 41% higher than prior year.
• New royalty acquisitions in the US and Africa add near-term cash flow and exploration upside.

About Elemental Altus Royalties

Elemental Altus Royalties is a Canada-based precious metals royalty company focused on acquiring royalties on producing and near-producing mines. With a portfolio of 10 royalties on mines in Australia, Africa, North and South America, Elemental Altus has seen rapid growth in revenue, adjusted EBITDA and cash flow. The company’s vision is to build a global gold royalty company offering investors superior exposure to gold with reduced risk.

Strong Financial Results Support Growth Trajectory

In the first nine months of 2023, Elemental Altus delivered record revenue of $7.8 million, a 10% increase over the same period last year. More significantly, adjusted revenue, which includes the company's equity investment in the Caserones mine, reached $12.2 million, representing stunning 58% growth compared to 2022.

Higher production volumes from the operating mines underlying Elemental Altus’ royalties drove the revenue gains, which translated into record adjusted EBITDA of $7.8 million, 41% more than last year. In Q3 2023 alone, the company generated gold equivalent ounces (GEOs) of 1,886, bringing the year-to-date total to 6,187 GEOs, 47% higher than the first three quarters of 2022.

The strong financial performance provides fuel for Elemental Altus’ growth plans, funding new royalty acquisitions while positioning the company to capitalize on a robust pipeline of near-term production from assets such as the Bonikro gold mine in Côte D’Ivoire.

Expanding Royalty Portfolio Adds Cash Flow and Exploration Potential

In moves that will further accelerate top and bottom line growth, Elemental Altus executed three strategic royalty transactions in Q3 2023:

• A 0.68% net smelter return (NSR) royalty on the Cactus Copper Project in Arizona, which hosts 5.17 billion pounds of copper in measured and indicated resources
• Increased its NSR royalty to 0.473% on the producing Caserones copper mine in Chile
• Created nine new gold royalties in Africa through the sale of exploration projects, including a royalty on the Diba project in Mali that neighbours Allied Gold’s producing Sadiola mine

The Diba royalty stands out given the project’s near-term production potential and location adjacent to an existing mine. Elemental Altus sold Diba to Allied Gold and received an uncapped 3.0% NSR royalty on the first 226,000 ounces produced, stepping down to 2.0% thereafter. With Allied expecting to fast-track Diba into production in the first half of 2024, Elemental anticipates the royalty will represent a meaningful source of gold revenue starting next year.

At the Cactus Project in Arizona, Elemental now holds a royalty covering the majority of the project area, where owner Arizona Sonoran is working towards a pre-feasibility study in early 2024. The large measured and indicated copper resource provides the potential for a 30+ year mine life producing 45-50 thousand tons of copper annually.

Though early stage, the African exploration royalties offer strong optionality through Elemental’s equity exposure in the potential mine developments. As at the Diba project, any discoveries successfully advanced to production have the potential to generate near-term cash flows under the newly created royalties.

Ramp Up at Bonikro to Drive Growth in 2024 and Beyond

While the third quarter results and recent transactions set the stage for Elemental Altus’ next phase of growth, investors can expect more tangible catalysts in 2024 and beyond. The company’s royalty revenue is poised for another leg higher as Allied Gold scales up production volumes on Elemental’s land position at the Bonikro gold mine.

Situated on “Pushback 5” at Bonikro, the royalty currently delivers revenue to Elemental Altus based on both gold price and production volume. With Allied mining increasing tonnage from Pushback 5, Elemental anticipates the royalty will represent the majority of Bonikro’s output in coming years.

As Elemental CEO Frederick Bell stated: “In terms of continued revenue growth, we expect our Bonikro gold royalty in Côte d'Ivoire to materially ramp up in the coming quarters and represent the majority of production for the mine in the coming years."

As production climbs at Bonikro alongside the expected start up of the Diba gold royalty in 2024 currently being fast-tracked by Allied, Elemental Altus appears poised to continue outpacing revenue, cash flow and GEO growth for the next several years.

Conclusion

With its high-growth royalty portfolio, Elemental Altus Royalties represents a unique precious metals investment opportunity. The company offers superior leverage to the upside in gold and copper prices, while revenue from 10 producing mines significantly derisks its value proposition versus traditional mining equities.

As Elemental graduates to the next stage of its rapid expansion, royalty revenue from Bonikro’s impending production ramp up and near-term catalysts like Diba’s 2024 on-line target should drive another leg higher for financial results. For investors seeking precious metals exposure that combines growth, cash flows and exploration upside, Elemental Altus checks all the boxes.