Elemental Royalties, Altus Strategies merge, creating global gold royalty company

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Elemental Royalties (TSXV: ELE) and Altus Strategies plc (TSXV: ALTS) have agreed to a merger, with the share capital of Altus acquired by Elemental.

Altus shareholders will receive 0.5940 shares in the new company for each Altus share, with Elemental shareholders owning 52.9% and Altus shareholders owning 47.1% of the total issued share capital.

“The boards of Elemental and Altus believe that the merger has compelling strategic logic and represents an attractive opportunity for both companies to create a global gold royalty company: New Elemental Altus Group with a combined portfolio of 69 assets across 13 jurisdictions, concentrated in tier-1 mining jurisdictions, of which 11 are in production, and primarily focused on gold,” the companies said in a joint statement.

Elemental’s portfolio includes a 1% net smelter return (NSR) on Endeavour Mining’s Wahgnion mine in southwest Burkina Faso, a 2% NSR on Capricorn Metals’ Karlawinda project in Australia and a 1% NSR on Equinox’s 700 km2 Mercedes gold-silver mine in Mexico.

Estimated combined adjusted 2022 revenue of the New Elemental Altus Group is $19.6 million, estimated to lead to combined adjusted 2023 revenue of $24.6 million, the companies said.

New Elemental Altus Group’s NAV will be based on producing assets in La Mancha and Condire having provided shareholder irrevocable undertakings over 44.6% of Altus’s issued share capital; and South32 and La Mancha having entered into voting and support agreements in respect of 25.9%. of Elemental’s issued share capital.

An eight member board will be constituted from a combination of existing directors from both Elemental and Altus.

Earlier this year Gold Royalties attempted unsuccessfully to acquire Elemental Royalties. Its all-share hostile takeover bid expired on May 12, bringing an end to a saga that began last October.