Fred Bell, CEO of Elemental Altus Royalties (TSX.V:ELE – OTCQX:ELEMF), joins us to review the Q3 2023 operations and financials numbers, as well the business strategy in 2024 across the Company’s portfolio of royalties and project operators.

Third Quarter 2023 Financial Highlights:

• Revenue of US$2.4 million and Adjusted Revenue of US$3.7 million, inclusive of Caserones royalty revenue
• Gold Equivalent Ounces (GEOs) of 1,886oz
• Adjusted EBITDA of US$2.2 million
• US$2.0 million Cash from Operations plus distributions from associates, inclusive of Caserones royalty revenue

Year to September 30, 2023 Highlights:

• Record Revenue of US$7.8 million (increase of 10% vs 2022) and Adjusted Revenue of US$12.2 million (increase of 58% vs 2022), inclusive of Caserones royalty revenue
• Record Gold Equivalent Ounces (“GEOs”) of 6,187oz (increase of 47% vs 2022)
• Record Adjusted EBITDA of US$7.8 million (increase of 41% vs 2022)

Royalty Portfolio Highlights and Key Developments:

• The Company announced the acquisition of a 0.68% Net Smelter Return (“NSR”) royalty on the Cactus Copper Project, which is 100% owned by Arizona Sonoran Copper Company Inc (ASCU.V) and a 0.5% gross revenue royalty on the Nyanga Copper-Nickel Project in Gabon, which is 100% owned by Armada Metals Limited from RCF Opportunities Fund L.P.

• During the Quarter, the Company increased its existing NSR royalty on the operating Caserones mine from private third-party vendors. The Company’s total effective NSR interest is now 0.473%
• The Company announced the sale of the Diba and Lakanfla gold projects in western Mali to Allied Gold ML Corp. The projects are contiguous with the Sadiola Large Scale Gold Mining licence that is owned and operated by Allied and the Company is expecting near term royalty revenue. The consideration for the sale was an uncapped 3.0% NSR royalty on the first 226,000 ounces of gold produced from a defined deposit and 2.0% NSR on all future production in excess of 226,000 ounces. A cash payment of US$1 million was also paid on closing and up to US$5 million in cash is payable in deferred production based milestones
• The Company completed the sale of an 80.1% interest in Akh Gold to In2Metals Explorer S.à r.l. in return for upfront and deferred cash, a US$10 million expenditure commitment and a 1.5% NSR royalty on its Egyptian exploration licences
• The Company agreed the sale of its Daro and Zager licences in Ethiopia to Canadian incorporated ANS Exploration Corp for US$0.2 million cash over 5 quarters, up to US$1 million in milestone payments, 2.5% NSR royalties with a 5 year buy-back option on up to 1% of the royalties for US$1.5 million each, and a retained equity interest 

Fred outlines some of the key personnel changes at the board level and how they’ll be accretive the future of Elemental Altus Royalties business focus.  Additionally, he outlines the new inaugural Royalty Asset Handbook, which provides detailed information about the Company’s portfolio of high quality and gold focused production and development stage royalties, as well as the underlying Mineral Resource and Mineral Reserve data.

We wrap up reviewing how these acquisitions and royalty generation transactions tie into their corporate vision and strategy around being a royalty company first and foremost, and how finding competent partners to invest in and further explore these properties at a much faster pace than Elemental could have.  This allows Elemental Altus to experience the exploration potential with a competent operating partner, but also reduces associated carrying and capital costs, and helps in regards to valuations relative to other royalty company peers.

If you have any follow up questions for Fred regarding Elemental Altus Royalties then please email us at Fleck@kereport.com or Shad@kereport.com.

• In full disclosure, Shad is a shareholder of Elemental Altus Royalties at the time of this recording

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