Elemental Altus – Acquisition Of The Additional 50 Percent Ownership Of 24 Existing Royalties From AlphaStream

The KE Report

Fred Bell, CEO of Elemental Altus Royalties (TSX.V:ELE) (OTCQX:ELEMF), joins me to review the recent acquisition of an additional 50% ownership of 24 existing royalties from AlphaStream Limited for a consideration of US$28 million in equity.

The Portfolio includes Elemental Altus' existing producing gold royalties on the Bonikro Gold Project, the Ballarat Mine, South Kalgoorlie Operations ("SKO") and 21 additional royalties located in Australia. Upon completion of the Acquisition, Elemental Altus, through a 100% interest in the Portfolio, will hold an effective 4.5% NSR royalty on Bonikro, a 2.5% NSR royalty on Ballarat, and a A$10/oz royalty and A$1 million Discovery Bonus on SKO.

Fred outlines what this will do for growing revenues and immediate cash flow, with approximately US$6 million additional revenue forecast in 2025 by consolidating the Portfolio. This acquisition should yield an expected pro forma 2025 revenue increase of ~25% to US$31 million, driving a material step up in free cash flow with no increase in management costs. This Portfolio also provides immediate exposure and leverage to gold prices that are significantly above consensus forecasts.

With regards to the other 21 non-producing royalties, we discussed he exploration optionality in partnering with solid operators in Australia including Northern Star Resources Limited, Evolution Mining Limited, Hancock Prospecting Pty Ltd, Mineral Resources Limited and Zijin Mining Group Company Limited. In particular, the Elemental Altus team is animated by the growth potential at the Hampton-Boulder-Jubilee and Hercules deposits at Northern Star's SKO in Western Australia, which they will be working to further expand and develop.

As part of the transaction, AlphaStream joins the share register as another cornerstone shareholder moving forward with the right to nominate a director to the Board, provided that AlphaStream's shareholding remains over 15% of Elemental Altus' outstanding common shares. AlphaStream will maintain pre-emptive and top-up rights in favor of its ability to maintain a shareholding of over 15% of Elemental Altus' outstanding common shares.

Wrapping up we discuss that while this acquisition transaction was done with equity, that the company has a solid cash position, incoming revenues, and a credit facility to go after future accretive transactions.

If you have any follow up questions for Fred regarding Elemental Altus Royalties, then please email me at [e-mail].

• In full disclosure, Shad is a shareholder of Elemental Altus Royalties at the time of this recording.

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