Altus Strategies Plc and Newcrest Mining has entered into two sale and purchase agreements; each an SPA in respect of the acquisition of a portfolio of up to 24 royalties and royalty interests from Newcrest Mining Ltd and certain of its group companies (the acquisition).
The portfolio consists of royalties on two producing gold mines, one near-production gold mine as well as up to 21 near-term development and exploration stage projects. 23 of the royalty projects are located in Australia and one royalty project is in Côte d’Ivoire, West Africa.
The royalties are being acquired through a strategic joint venture with AlphaStream Limited, a specialist mining royalty and streaming company. The consideration to be paid by Altus for its interest in the acquisition is US$24 million.
Royalties and royalty interests
Steve Poulton, Chief Executive of Altus, noted the 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. The Newcrest portfolio provides Altus with immediate cash flow, portfolio diversification and is heavily weighted towards gold in Australia, a ‘top tier’ jurisdiction. The deal secures royalties and royalty interests over two producing mines, one near production mine and up to 15 development stage projects and up to six exploration stage assets. A further highlight is that the operators of many of the projects are globally recognised and respected groups.
“Following a competitive process, we are acquiring the royalties from Newcrest for up to US$24 million. We are excited by the potential we see for future upside in the royalties and delighted to be working in a strategic partnership on the acquisition with AlphaStream, a specialist mining royalty investment and streaming company. By working in partnership with other royalty groups on strategic acquisitions, our shareholders gain exposure to higher quality royalty assets, without having to finance them exclusively,” he said.
Karim Nasr, Chief Executive of La Mancha and a Director of Altus, commented: “La Mancha has a track record of supporting the long-term expansion plans of our portfolio companies. Altus has significant momentum and we strongly support the company in creating value from the acquisition of accretive long term and sustainable royalty income and from its complimentary organic royalty generation activities across Africa. La Mancha currently owns 35% of the issued share capital of Altus and intend to participate to that level in the proposed fundraise. We look forward to supporting Altus along its clear growth trajectory and doing all we can to help the company maximise value for all shareholders.”