Altus heralds 'transformational' Newcrest deal

AIM-listed Altus Strategies has teamed up with Abu Dhabi-based royalty player AlphaStream to buy a portfolio of precious metals royalties from Aussie-based Newcrest Mining for US$37.5 million.

Altus heralds 'transformational' Newcrest deal

The portfolio comprises 24 royalties and royalty interests, the biggest of which is a 4.5% NSR on the Allied Gold-operated Bonikro mine in Cote D'Ivoire, which is ready to start producing and is expected to ramp up to 100,000oz per year in the March quarter of 2023.

The remaining assets, all of which are Australia, include two producing mines - Ballarat, operated by Singapore-listed Shen Yao Holdings, and the South Kalgoorlie Operations (SKO) underground mine, operated by Northern Star Resources.

Rounding out the portfolio are 15 development stage and six exploration stage assets.

"This proposed acquisition of a material portfolio of mining royalties and royalty interests from Newcrest heralds the transformation of Altus into a major royalty company backed by La Mancha," said Steve Poulton, CEO of Altus.

"The Newcrest portfolio provides Altus with immediate cash flow, portfolio diversification and is heavily weighted towards gold in Australia, a 'top tier' jurisdiction," he added.

In terms of the deal structure, Altus will pay $24 million, which it has funded via a £19.8 million placement at 53.5p on AIM and C90c on TSX-V, with major shareholder La Mancha retaining its 35% interest with a £6.8 million investment.

AlphaStream will settle the remaining US$17.5 million with Newcrest.

The Bonikro royalty will be held 50/50 between Altus and AlphaStream, while the Aussie portfolio will be held by a holding company in-country which will be 80.1% owned by Altus and 19.9% by AlphaStream.

Altus said the portfolio would generate about US$3.5 million per year in post-tax revenue over the next 10 years, based on the company's gold price assumptions which start at US$1,879/oz in 2022 and slide to US$1,599/oz in 2025 and beyond.

Altus' portfolio of assets now extends to 33 royalties and 27 projects interests across nine countries and nine commodities.

Shares in Altus were down 4.8% at 11am on Tuesday in London, with the company capitalised at £48.23 million.

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