Chile Interest To Be Acquired For US$34.1 Million
Altus Strategies Plc (AIM: ALS, TSXV: ALTS, OTCQX: ALTUF) entered into an agreement dated to acquire an effective 0.418% net smelter return royalty (NSR) interest on the producing Caserones Copper Mine, located in the Atacama region of northern Chile.
The company expects the Caserones NSR to provide it with immediate and long-term cash flows, in line with its stated growth strategy.
Closing is anticipated to take place in two phases, with both closings being completed by 01 September 2021. The consideration to be paid by Altus for the NSR interest is US$34.1 million in cash. The NSR interest will be acquired from private vendors via a special purpose vehicle (SPV) incorporated in Chile. Altus Royalties Ltd (ARL, a 100% owned subsidiary of Altus) and EMX Royalty Corporation have equal ownership of the SPV.
Chief Executive, Steven Poulton, said the company has also entered into a US$29 million acquisition loan facility agreement with a wholly owned subsidiary of La Mancha Fund SCSp.
Highlights:
- Altus to acquire a 0.418% NSR interest on the Caserones copper mine in Chile
- NSR interest expected to generate cash flow of US$3.2M (post-tax) per year to Altus
- Caserones has been operating since 2015 and has 17 years of mine life remaining
- Consideration of US$34.1M to be paid in cash by Altus
- Acquisition to be part-financed by US$29M loan facility from major shareholder La Mancha
- La Mancha holds a 35.08% interest in Altus and its Chief Executive is a Director of Altus
- SPV owned by Altus and EMX to share revenues from a combined 0.836% NSR interest
- Additional royalty transactions under review globally with a focus on gold and copper
“Our acquisition of a significant cash paying royalty on a long-life copper mine in a tier-1 mining jurisdiction represents a landmark transaction for Altus. We will acquire an effective 0.418% NSR royalty interest on the Caserones copper mine in the Atacama region of Chile, for a cash consideration of US$34.1M. The NSR interest is expected to generate approximately US$3.2 million (post-tax) per year attributable to Altus,” Mr Poulton said.
The Caserones mine is owned and operated by JX Nippon Mining & Metals Corporation of Japan and has an estimated 17 years of production remaining.
“The Acquisition of the NSR interest will be part-financed by a US$29 million acquisition bridge loan facility provided by La Mancha, our largest shareholder, which has recently established a US$1.4 billion mining investment fund. The provision of the facility underscores La Mancha’s commitment to the long-term growth of Altus and the quality of this Acquisition. We are also delighted to have formed a strategic relationship with NYSE American and TSX-V listed EMX Royalty Corp., to acquire the NSR through the creation of a Chilean SPV company. Our partnership with EMX is strengthened by Michael Winn, the Chairman of EMX, who is also a Non-Executive Director of Altus.
“Following this Acquisition, Altus will receive significant quarterly royalty income and will have long- term exposure to copper. We expect the demand for copper to remain strong in the years ahead, as the global economy seeks to decarbonise in parallel with continued infrastructure development, urbanisation and wealth creation in emerging markets.
“Altus is an established royalty generator with an experienced management team, a portfolio of 33 exploration and development projects and 9 organically generated royalties. We are actively reviewing a number of additional royalty transactions globally, primarily focused on gold and copper, and I look forward to updating shareholders on these opportunities in due course.”
For further information please visit: https://www.altus-strategies.com/
