Elemental Altus – Review Of Q2 2023 Operations And Financials, Recapping 5 Royalties Acquired And 3 New Royalties Generated
Fred Bell, CEO of Elemental Altus Royalties (TSX.V:ELE – OTCQX:ELEMF) joins us to review the Q2 2023 operations and financials numbers, as well as 5 new royalties acquired and 3 new royalties generated organically from the Company’s portfolio of exploration properties.
Second Quarter 2023 Financial Highlights:
- Record revenue of $2.6 million, up 25% compared to Q2 2022
- Record adjusted revenue of $4.7 million, inclusive of Caserones royalty revenue, up 127% compared to Q2 2022
- Record Gold Equivalent Ounces of 2,377 ounces, up 109% compared to Q2 2022
- Record adjusted EBITDA of $3.3 million, up 184% compared to Q2 2022
Royalty Portfolio Highlights and Key Developments:
- On March 27, 2023 Lundin Mining Corporation (TSX: LUN) announced that it had entered into a binding purchase agreement to acquire a 51% interest in the Caserones copper-molybdenum mine in Chile
- On March 9, 2023, the Company entered into a binding agreement to acquire an additional 0.025% effective net smelter return (NSR) royalty on Caserones
- On July 12, 2023, the Company agreed to purchase an additional effective 0.030% NSR on Caserones, increasing the total effective NSR held to 0.473%
- On April 20, 2023, the Company announced that it had completed the acquisition of an additional 0.25% NSR royalty on the Pickle Crow project in Ontario, Canada from a private third-party entity for total consideration of US$300,000 in cash, increasing the effective NSR royalty held by the Company to 2.25%
In addition to the 2 royalties picked up on the cornerstone Caserones copper royalty in Chile, and the additional NSR at the Pickle Crow Project in Ontario, we also highlighted then news released August 23rd, about the acquisition of two existing royalties from RCF Opportunities Fund L.P. for consideration of US$10,000,000 payable in common shares of Elemental Altus. The Royalties include an aggregate 0.68% net smelter return (NSR) royalty on the Cactus Project in Arizona, which is 100% owned by Arizona Sonoran Copper Company Inc., and a 0.5% gross revenue royalty (GRR) on the Nyanga Project in Gabon, which is 100% owned by Armada Metals Limited (ASX:AMM).
We then discussed the 3 royalties generated by the Company on some of it’s earlier stage exploration properties, and the value creation and net benefit to Elemental Altus shareholders in the near-term and longer-term. First there was the project sale and new net smelter royalty at the Diba Gold Project in Mali to Allied Gold, and the generation of two new gold and copper royalties off exploration-stage projects in Ethiopia, through the sale of its subsidiary Altau Resources Ltd. to Canadian incorporated ANS Exploration Corp. Most recently the company announced on August 28th the new NSR created in Egypt with US$10 million to be invested by In2Metals in Akh Gold. Elemental Altus will receive a 1.5% NSR royalty on current licenses and license applications totaling 1,914km2, cash of US$1.1 million on closing and US$0.4 million on or before August 30, 2024, a milestone payment of US$5 million on definition of a 3 million ounce resource, and the rights to co-fund its 19.9% equity interest in Akh Gold following the Subscription.
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 at Shad@kereport.com.
- In full disclosure, Shad is a shareholder of Elemental Altus Royalties