Elemental Altus Royalties Timeline 2023 - Building a Global Royalty Portfolio

About Elemental Altus Royalties

Elemental Altus Royalties is a gold-focused royalty company providing exposure to producing, development, and exploration stage mining assets operated by established companies. Headquartered in Canada, Elemental has a portfolio of 10 royalties across 14 countries, with around 75% of net asset value in OECD jurisdictions. The company aims to build a global gold royalty business offering investors superior gold exposure with reduced risk.

Recent acquisitions expanded the company's royalty coverage and presence in favorable jurisdictions like Australia and the Americas, increasing its stake in the Caserones copper royalty in Chile, and acquiring royalties on the Pickle Crow project in Ontario and the Hope Brook project in Newfoundland. Producing assets were expected to generate $17+ million in 2023 revenue.  Led by CEO Frederick Bell, Elemental Altus intends to continue executing accretive royalty transactions to grow its portfolio. 

What Happened in 2023?‍

December‍

Elemental Altus’ Inaugural Royalty Asset Handbook‍

Elemental Altus Royalties published its inaugural Asset Handbook providing detailed information on the company's portfolio of high quality, gold-focused production and development stage royalties. 2023 had proven to be another record year for Elemental Altus with growth across all key metrics. Near-term catalysts were outlined such as expected first production from the Diba gold project royalty in Mali in 2024, an upcoming Cactus pre-feasibility study, and initial drill results from Lundin's expanded exploration program at Caserones expected in the first half of 2024. ‍

Board Changes‍

Executive Chairman Steven Poulton has advised the company of his intention to retire from the board effective January 1, 2024. Mr. Poulton had over 16 years of combined service, originally as CEO and co-founder of Altus Strategies which merged with Elemental Royalties in 2022. Following retirement, he would continue to be available as an independent consultant.‍

November‍

Completion of Diba Gold Project Sale to Allied Gold ‍

A previously disclosed sale of the Diba gold project in western Mali to Allied Gold Corporation was completed. The sale included the Korali-Sud Small Scale Mining and Lakanfla Exploration Licenses. In return, Elemental Altus received an uncapped net smelter return royalty expected to generate material near-term revenue. The asset sale furthers Elemental Altus’ strategy of monetizing exploration projects to generate royalties and near-term cash flow. With a projected average production of 230,000 gold ounces over 2024-2025 after integrating Diba, the deal is expected to meaningfully contribute to Elemental’s revenue growth under the newly created royalty.‍

ELE Strong Q3 Results‍

In the first nine months of 2023, Elemental Altus Royalties (TSXV:ELE) achieved a record revenue of $7.8 million, a 10% increase from 2022, and record adjusted revenue of $12.2 million, representing 58% growth driven by portfolio expansion. Additional records included gold equivalent ounces of 6,187 oz and an adjusted EBITDA reaching $7.8 million, 41% higher than last year. Through the sale of exploration projects, nine new gold royalties were acquired by the company in Africa.

Elemental Altus anticipates its 3.0% royalty on the Diba Project in Mali will generate meaningful gold revenue when production starts in 2024. With production ramping up on the company’s royalty position at Bonikro operated by Allied Gold, alongside Diba fast-tracked to production, Elemental Altus appears well-positioned for continued revenue and onto the next phases of rapid expansion.‍

October‍

Initiatives to Boost Margins‍

Through acquisitions, Elemental Altus has built a portfolio of over 90 royalties and streams with 10 producing assets globally. A 2022 merger with Altus Strategies significantly expanded the company's asset base. Top revenue generating royalties include the Caserones copper mine in Chile operated by Lundin Mining with an effective 0.9% NSR and a 2% NSR on the Karlawinda gold project in Australia operated by Capricorn. 

Several margin growth initiatives include three early stage exploration projects to reduce annual expenditures by $2-2.5 million starting in Q4 2023. Over 20 new royalty and stream acquisitions  completed in 2023, the company plans to remain active and deliver strong growth with multiple catalysts expected through 2024.‍

Elemental Altus’ Stability in Diversification and Acquisitions Strategy ‍

Unlike miners, royalty companies can benefit during both highs and lows of commodity price cycles, earn higher revenue without major capital costs during boom times, and still earn revenue from assets that continue producing in bust cycles. Elemental Altus proves its strengths with 8 new royalties, reflecting its disciplined strategy focused on quality over quantity. Elemental Altus is in the course for adjusted annual revenue of $17 million for 2023 and maintains reducing risk on the sector’s unpredictability through diversification across jurisdictions and commodities.‍

September‍

ELE Acquires Two Major Existing Royalties‍

Elemental Altus’ announces latest major acquisitions of two royalties: Arizona Sonoran’s Copper’s Cactus Copper Project from RCF, and Gabon’s Nyanga Copper-Nickel Project held by Armada Metals.

Earlier in 2023, Elemental Altus sold the Diba Lakanfla gold project to Allied Gold while retaining a royalty providing exposure without further expenditure. Key investment thesis points include inflation protection, gold leverage, near-term revenue growth from projects like Bougouni, reduced mining risk, and exploration upside. With inflation pressures expected to be supportive for gold prices longer-term, the company was positioned for significant cash flow growth from its royalty portfolio.‍

August‍

Extracting Value and Delivering Growth on Royalty Portfolio

Royalty and portfolio updates were released by Elemental Altus Royalties positioning itself to benefit in current market conditions. Updates include:

• Sold its projects in Ethiopia, to Allied Gold Corp, for cash payments and a 5% royalty on the projects
• Sold the Diakha-Siribaya project in Mali for $6M in cash payments plus a 3% royalty
• Acquired an additional 0.42% royalty on the Casserones copper project in Chile operated by Lundin Minin,

These movements brought in cash payments and royalties on assets moving into production, while reducing exploration spend and increased exposure to a large, long-life asset approaching production. With strong cash generation from existing royalties, Elemental Altus was selectively acquiring additional royalties at attractive valuations during market dislocations.‍

Q2 2023 Company Performance

Elemental Altus Royalties' second quarter of 2023 financial results were announced, with a record adjusted revenue of $4.7 million, representing 127% growth compared to Q2 2022. The company also generated record attributable production of 2,377 gold equivalent ounces (GEOs), up by 109%. The company has increased royalty revenue for five straight years where itslargest royalties, the Caserones mine in Chile and the Carlawinda mine in Australia, contributed over half of the revenue. With revenue scaling rapidly in the first half of 2023, Elemental Altus was on track to meet or potentially exceed its full-year guidance of 9,000-10,200 gold equivalent ounces weighted to the second half. ‍

Partnering with In2Metals Explorer for Egypt Assets

Elemental Altus Royalties signed an agreement with In2Metals, an affiliate of cornerstone shareholder La Mancha Investments S.à r.l., regarding Akh Gold. Under the agreement, In2Metals acquired an 80.1% interest in Elemental Altus’ subsidiary Akh Gold for $10 million. Elemental Altus received $1.5 million upfront and will retain a 19.9% stake in Akh Gold. Additionally, a 1.5% net smelter return royalty was created across Akh Gold's 1,914 km² license in Egypt. The deal furthers Elemental Altus' strategy of generating royalties and realizing value in frontier regions following similar transactions in Mali and Ethiopia this year. ‍

July‍

Increased NSR Interest on Caserones Copper-Molybdenum Mine 

An additional net smelter return (NSR) interest in the Caserones copper-molybdenum mine in Chile was made by Elemental Altus for $2.6 million, increasing the company's effective NSR royalty on Caserones to 0.473%. The deal came after Lundin Mining stated its intention to acquire a 51% stake in the mine.

Caserones is a large, open pit copper-molybdenum deposit that has been in operation since 2014, producing concentrates and copper cathodes. The deal furthers the company’s strategy of acquiring uncapped royalties on producing mines operated by established counterparts. Elemental Altus sees Caserones as having potential for resource expansion under Lundin Mining’s majority stake.‍

Completion of Lundin Mining’s Acquisition of Caserones‍

Lundin Mining Corporation has acquired 51% of the Caserones copper-molybdenum mine in Chile. Elemental Altus believes Lundin Mining's regional expertise and strong community engagement will benefit Caserones and looks forward to potential synergies and exploration upside under Lundin Mining's majority ownership of Caserones.

In the first half of 2023, Caserones produced around 69,700 tonnes of copper and 2,400 tonnes of molybdenum. Reserves stood at 2.55 million tonnes of copper and 105,000 tonnes of molybdenum, noting that this current mineral resource only includes drilling up to the end of 2017 with over 20,000 metres of subsequent drilling not yet added.‍

Elemental Altus Sells High-Potential Diba Gold Project in Mali‍

With another near-term producing royalty in its portfolio, Elemental Altus announced to receive Net Smelter Return (NSR) royalty of up to 3% on future gold produced from the Diba Gold Project inwestern Mali. Elemental Altus will receive $1 million on closing plus a further $5 million in payments tied to production milestones and commercial production. Initial mining will likely target Diba's oxide gold deposits containing over 199,000 ounces at 1.52 g/t. Allied Gold plans infill drilling and to incorporate Diba into Sadiola's production schedule potentially as early as 2024.‍

May‍

Q1 Performance: Elemental Altus Delivers Record Revenue‍

Mergers with Altus Strategies allowed the company’s revenue to rise 74% year-over-year, while adjusted EBITDA jumped 140% in Q1 2023 compared to Q1 2022. The expanded portfolio post-merger was driving revenue higher, with diversification now mitigating reliance on a single stream. Ongoing portfolio additions like the Pickle Crow royalty fuels growth while existing cash flow avoided excessive dilution. At around a $200 million market cap, Elemental Altus Royalties can still multiply in size as execution progresses.‍

April‍

Elemental Altus Record Revenues for 2022‍

ELE's preliminary Q4 2022 revenue was released with an approximately $2.6 million giving a total preliminary 2022 annual revenue for the company to be around $9.6 million. Adjusted revenue was approximately $10.5 million, up 59% and marking the fifth straight year of record revenue growth. The preliminary adjusted fourth quarter revenue reflected sales of about 1,600 attributable gold equivalent ounces. While guidance was finalized, Elemental expects another increase in 2023 compared to 2022 predominantly due from full year of productions of assets acquired in the Altus Strategies merger. ‍

65% Increase Guidance for 2023, Additional NSR on Pickle Crow Gold Asset‍

Elemental Altus Royalties announced 2023 guidance of between 9,000 to 10,200 gold equivalent ounces (GEOs), representing an approximate 65% increase compared to the 5,800 GEOs received in 2022. The 2023 production increase was attributed to an uplift at the Bonikro gold mine and incremental gains at Karlawinda, Wahgnion and Mercedes. 

Elemental Altus also paid $300,000 cash to acquire an additional 0.25% net smelter return royalty on the Pickle Crow gold asset, increasing its total royalty to 2.25% on the project.‍

Operating and Financial Results for the Q4 2022‍

Operating and financial results for the fourth quarter of 2022 for Elemental Altus Royalties were released, highlighting the company's revenue grew 11% year-over-year to $2.6 million, adjusted revenue rose 21% to $2.8 million, and attributable GEOs increased 25% to 1,621 ounces. Additional Q4 2022 highlights include completion of the sale of Morocco-focused copper subsidiary, Aterian Resources Ltd., generating 15 new royalties for the company, and the US$50 million revolving credit facility agreement with National Bank of Canada (“NBC”) and Canadian Imperial Bank of Commerce (“CIBC”).‍

March‍

Renowned Project Generation Expertise‍

With a strong portfolio of 90 royalties, Elemental Altus Royalties highlights revenue-generating assets including the Karlawinda, Casserones and Wahgnion mines.  Leveraging Altus’ project generation expertise provides investors a pipeline of future cash-flowing royalties and exploration upside. Elemental Altus generates more cash flow than royalty peers with comparable market capitalizations, coming from its 11 producing mines across 7 countries weighted toward gold but also with copper exposure. With initial revenue funding further investments, an undrawn credit facility and focus on new deals, Elemental Altus continues to offer investors commodity exposure, free cash flow from producers, and significant optionality.‍

More Portfolio Updates

Elemental Altus Royalties provided updates on developments at several assets in its stream portfolio. Highlights included:

• Positive drill results and production on track to meet guidance at the Karlawinda gold mine
• Increased 2023 production guidance at the Wahgnion gold mine
• New high-grade vein discoveries at the Mercedes gold mine
• Resource estimate increases were also annourceed at the Panton PGM-Ni project, Hope Brook gold project, and Wudinna gold and rare earth project. 
• Processing was temporarily halted on the Ballarat gold mine and the Caserones copper-molybdenum mine but mining still continues on these sites.

In addition, Sandra Bates was appointed Corporate Secretary. Elemental Altus noted it will release a Q4 trading update shortly and the company highlighted continued investment and exploration success across it's royalty portfolio.‍

ELE Acquired Royalty Interest on Caserones Copper Mine

Elemental Altus Royalties (TSXV:ELE) entered into a binding agreement to acquire an additional 0.025% net smelter return (NSR) royalty on the producing Caserones Copper-Molybdenum mine in Chile for approximately US$2 million in cash. The acquisition increases Elemental Altus' effective royalty to 0.443% NSR

The royalty acquisition bolsters Elemental Altus' existing diversified revenue base in leading mining jurisdictions and supports the company’s core philosophy of acquiring uncapped, revenue generating royalties on long life assets to continue adding value for shareholders over many years.‍

February

Portfolio Expansion with 19 Royalties from First Mining Gold 

Elemental Altus Royalties acquired 19 royalties from First Mining Gold Corp for $5 million in cash and shares. Pickle Crow and Hope Brook are former operating mines that have produced over 2.2 million ounces of gold historically. The purchase price will be funded through $3.5 million in cash and $1.5 million in Elemental Altus shares, which will be subject to a 6-month trading escrow. ‍

Gold Purchase and Sale Agreement Update on Ming Mine

Rambler Metals and Mining paused operations at the Ming Mine due to pending delivery of key supplies. This follows Rambler's November 2022 announcement of an efficiency improvement program and ongoing discussions regarding potential refinancing or restructuring. Rambler is contracted to make minimum gold deliveries of 1,200 gold ounces to Elemental Altus for the first three years of the Gold Stream. Elemental Altus noted it will continue monitoring the situation with Rambler and the Ming mine operations.‍

Elemental Altus Completes Acquisition of 19 Royalties from First Mining Gold

The acquisition of 19 royalties from First Mining Gold Corp has been completed, adding high quality development stage projects to Elemental Altus' portfolio to create unique value and support the company’s growth story. The acquired royalty package significantly expands the development pipeline, including a 2% NSR royalty on the Pickle Crow gold project and a 1.5% NSR royalty on the Hope Brook gold project.

Completing the First Mining royalty portfolio acquisition furthers Elemental Altus’ strategy of acquiring uncapped royalties on assets with clear pathways to restarting production in the medium term.‍

January‍

Elemental Altus Appoints New CFO‍

Elemental Altus Royalties announced the appointment of David Baker as Chief Financial Officer (CFO). Mr. Baker has over 12 years of industry experience and was most recently Executive Vice President of Business Development at Elemental Altus, having joined the company in April 2020. Outgoing CFO Matt Anderson served since 2020 and will continue working with the company as a consultant going forward.