Fred Bell, CEO of Elemental Altus Royalties (TSX.V:ELE – OTCQX:ELEMF), joins me to review their operational and financial results from Q1 2024, a recent royalty acquisition now partnered with Rio Tinto, and a few royalty partner updates. We start off diving into the key metrics and takeaways from the first quarter financials.
- Royalty revenue of US$3.3 million and adjusted revenue of US$4.7 million, up 24% on Q1 2023
- Attributable Gold Equivalent Ounces (“GEOs”) of 2,283 ounces, up 13% on Q1 2023
- Operating Cash Flow plus Caserones dividends of US$1.2 million, compared with a loss in Q1 2023 and expected to grow through 2024 as margins increase
- Adjusted EBITDA of US$3.2 million, up 42% on Q1 2023
2024 Outlook
- Diba remains on track to be the Company’s newest producing gold royalty. Allied Gold Corp (TSX: AAUC) have announced that mining is expected to commence in Q2 2024
- Elemental Altus on course to meet guidance of 10,000 to 11,700 GEOs as production increases over the year. This guidance represents at its midpoint a 19% increase on 2023 and provides top-line exposure to gold and copper prices
- Repaid US$5 million debt in Q1 2024, leaving US$25 million undrawn on the credit facility and with approximately US$9 million cash on quarter end prior to Q1 royalty receipts. The Company intends to continue to reduce the amount drawn on the credit facility while maintaining financial flexibility to make new acquisitions
- Falling G&A expenditure and significant expected cash flow generation following merger synergies and asset sales, which are also expected to generate milestone payments placing the company in a position to generate material cash flow
During the interview we reviewed th increasing revenue and expanding margins over the course of 2024, and why the company strategy was to aggressively go after cash-flowing assets. We then highlighted that the Diba royalty is on track to commence mining in Q2 and has the potential to be a material long-life royalty for the company based on the exploration potential once it is in production. Fred discusses how this complements other long-life royalty assets like Karlawinda and Caserones, as key cornerstone assets.
We also discussed the large portfolio of development and explorations assets that will provide discovery optionality to future value creation. To that point we discussed the recent acquisition of a royalty over a Rio Tinto operated lithium project in Rwanda, where the Company expect to see significant news flow over the course of 2024. The company is cashed up and looking to make more accretive acquisitions over the course of this year.
If you have any follow up questions for Fred regarding Elemental Altus Royalties, then please email me at Shad@kereport.com.
- In full disclosure, Shad is a shareholder of Elemental Altus Royalties at the time of this recording.
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