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Overview of Elemental Altus Royalties Corp.
Elemental Altus Royalties Corp. (TSXV: ELE, OTCQX: ELEMF) is a leading income-generating precious metals royalty company with a diversified portfolio of producing, pre-production, and discovery-stage assets. The company focuses on acquiring uncapped royalties and streams over producing or near-producing mining projects operated by established counterparties. This strategic approach offers investors superior exposure to gold and other precious metals while minimizing the risks typically associated with direct mining operations.
Core Business Model
Elemental Altus generates revenue through royalties and streaming agreements, which provide a percentage of revenue or physical production from mining projects in exchange for upfront capital. Its portfolio includes 11 producing royalties and numerous pre-production and exploration-stage assets, emphasizing high-quality, long-life projects in Tier 1 mining jurisdictions. By maintaining a diversified portfolio across multiple commodities and geographies, the company reduces risk and enhances its growth profile.
Key Assets and Portfolio Highlights
- Karlawinda Gold Project (Australia): A cornerstone asset contributing significant royalty revenue through a 2.0% Net Smelter Return (NSR) royalty.
- Korali-Sud (Sadiola) Gold Project (Mali): A 3% NSR royalty on the first 226,000 ounces of gold production, transitioning to a 2% uncapped NSR thereafter.
- Mactung Project (Canada): A 4% NSR royalty on one of the world’s largest and highest-grade tungsten deposits.
- South Kalgoorlie Operations (Australia): A producing asset with significant exploration upside, featuring a discovery bonus structure.
The company’s portfolio spans multiple jurisdictions, including North America, Australia, and Africa, ensuring exposure to diverse mining environments and reducing geopolitical risks.
Competitive Advantages
Elemental Altus differentiates itself through its focus on acquiring high-quality, uncapped royalties and its ability to identify assets with transformative potential. Its partnerships with established operators and strategic acquisitions, such as the recent AlphaStream portfolio, enhance its revenue generation capabilities and long-term growth prospects. Additionally, the company’s disciplined cost management and exposure to direct gold prices provide robust margins and cash flow.
Industry Context
The precious metals royalty and streaming industry offers an attractive investment model, providing exposure to commodity price upside without the operational risks of mining. Elemental Altus operates in a competitive landscape alongside major players like Franco-Nevada and Wheaton Precious Metals but distinguishes itself through its diversified asset base and strategic focus on high-growth jurisdictions.
Conclusion
Elemental Altus Royalties Corp. is a dynamic player in the precious metals royalty sector, offering a compelling combination of income generation, portfolio diversification, and growth potential. Its focus on acquiring uncapped royalties over high-quality assets positions it as a trusted partner for mining operators and a valuable investment vehicle for those seeking exposure to gold and other precious metals.
Elemental Altus Royalties (TSXV: ELE, OTCQX: ELEMF) projects a 50% increase in adjusted revenue to US$32 million for 2025, following record preliminary annual revenue of US$16.3 million and adjusted revenue of US$21.6 million in 2024. The company expects to deliver 11,600-13,200 Gold Equivalent Ounces (GEOs) in 2025.
The 2024 results marked a 21% increase from 2023, achieving seven consecutive years of record revenue. The company anticipates up to US$15 million in additional payments from royalty milestones and previous agreements in 2025, with over US$10 million expected in the first half.
Additionally, Sandeep Singh, former CEO of Osisko Gold Royalties, has been appointed to the board as an independent non-executive director, replacing Robert Milroy. The company is now debt-free after repaying US$30 million over the past twelve months and has access to an enhanced US$50 million credit facility.
Elemental Altus Royalties (TSXV: ELE, OTCQX: ELEMF) reports that Allied Gold achieved approximately 48,000 ounces of gold production from Korali-Sud during Q4 2024, marking the first quarter of full production. The company holds a 3% Net Smelter Return (NSR) royalty on the first 226,000 ounces of gold produced at Korali, followed by an uncapped 2% NSR thereafter.
Sales from Korali-Sud will contribute to Elemental Altus in Q1 2025. The company expects to receive a US$1 million milestone payment, the first of four payments, 90 days after commercial production begins. A second milestone payment of US$2 million is due after 100,000 ounces production.
As of December 31, 2023, Korali-Sud had Proven and Probable Mineral Reserves of 6.1 million tonnes at 1.43g/t Au for 280,000 ounces gold, and Measured and Indicated Resources of 8.8 million tonnes at 1.33g/t for 377,000 ounces.
Elemental Altus Royalties (TSXV: ELE, OTCQX: ELEMF) has appointed Matthieu Bos to its Board of Directors as an independent non-executive director. The appointment is made under the company's investor rights agreement with La Mancha, replacing Jack Lunnon as La Mancha's director nominee. The Board maintains seven directors, with six being non-executives.
Bos, currently President and CEO of Falcon Energy Materials plc, brings significant mining capital markets experience. In his previous role as Executive Vice President Africa at Ivanhoe Mines, he was instrumental in delivering the Kamoa-Kakula Copper Project and helped secure US$3 billion in equity and debt financings from investors including Zijin Mining and CITIC Metal.
Elemental Altus Royalties (TSXV: ELE, OTCQX: ELEMF) reports significant developments for two of its royalty assets. Fireweed Metals secured US$15.8M from the U.S. Department of Defense and C$12.9M from the Canadian government to advance the Mactung Project, where Elemental holds an uncapped 4% NSR royalty. The funding will support mine design optimization, studies, and infrastructure improvements.
Additionally, Rumble Resources plans to expedite development at the Western Queen Gold Project in Western Australia, where Elemental holds an A$6-A$20/oz gold production royalty and 2% NSR. Rumble has entered a non-binding term sheet with Bain Global Resources and MEGA Resources, targeting a joint venture agreement by February 2025.
Elemental Altus Royalties (TSXV: ELE) (OTCQX: ELEMF) has published its 2024 Asset Handbook, showcasing its portfolio of over 80 royalties covering approximately 13,500 square kilometres. Key 2024 highlights include:
- Doubled existing producing royalties over Bonikro gold mine, Ballarat gold mine, and SKO
- Increased ownership of 21 exploration and development royalties in Australia
- Acquired 4.0% NSR on Mactung Project in Canada
- Allied Gold began mining at Korali-Sud1 with 3.0% NSR royalty
- Karlawinda Gold Project announced 30% production expansion to 150,000 ounces annually
- Arizona Sonoran Copper's Cactus Project PEA outlined 232 million pounds annual copper cathode production over 20 years
Elemental Altus Royalties held its Annual General and Special Meeting on November 28, 2024, announcing significant board changes and voting results. The company is reducing board size from nine to seven members, with Peter Williams and David Netherway withdrawing from re-election. Robert Milroy will retire by March 31, 2025. La Mancha committed to replace one of its nominees with an independent board member by December 31, 2024. The company will establish a Nominating & Governance Committee to oversee corporate governance and board nominations. Shareholders approved the Omnibus Plan and Advance Notice Policy, with all resolutions receiving strong support.
Elemental Altus Royalties reports strong Q3 2024 performance with record quarterly cash flow and EBITDA. Key highlights include: royalty revenue of $3.7M (up 32% YoY), adjusted revenue of $4.8M, and 1,941 Gold Equivalent Ounces (up 3% YoY). The company achieved operating cash flow plus Caserones dividends of $2.8M (up 42%) and adjusted EBITDA of $3.7M (up 72%). Notable acquisitions include a 4% royalty on Mactung tungsten project and AlphaStream's portfolio for $28M in equity. The company revised its 2024 guidance, expecting adjusted revenue of $21.6M-$23.1M and reduced GEO guidance to 9,000-9,500 ounces.
Elemental Altus Royalties has expanded its Credit Facility by exercising a US$10 million accordion feature, increasing the total borrowing limit to US$50 million. Royal Bank of Canada (RBC) joins as a new lender alongside National Bank of Canada (NBC) and Canadian Imperial Bank of Commerce (CIBC). The company has already repaid US$10 million in 2024 and currently has US$20 million drawn. The Facility's maturity date was extended from December 2025 to June 2027, with interest rates at SOFR plus 2.50% - 3.75% based on leverage ratio.
Elemental Altus Royalties (TSXV: ELE) (OTCQX: ELEMF) has scheduled the release of its Q3 2024 financial results for November 18, 2024. The company will host an investor webcast on November 19, 2024, at 11am Eastern Time (8am Pacific Time), which will include a results discussion and Q&A session. A replay of the webcast will be available on the company's website after the presentation.
Elemental Altus Royalties announces that Capricorn Metals plans a significant expansion at the Karlawinda Gold Project, where Elemental holds a 2.0% NSR royalty. The expansion targets annual gold production of 150,000 ounces, representing a 30% increase, through enhanced processing capacity to 6.5 Mtpa. The A$120 million expansion project is expected to complete by Q2 2026. Karlawinda's Mineral Reserves recently increased by 15% to 1,428,000 ounces gold, with a current mine life of 10 years. The project contributed US$4.6 million in revenue to Elemental Altus in 2023 and US$2.5 million in H1 2024.
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