13 December 2021 – TheNewswire - Altus Strategies Plc (AIM:ALS), (TSXV:ALTS), (OTC:ALTUF) announces that it has entered into two sale and purchase agreements (each an “SPA”) dated 13 December 2021 in respect of the acquisition of a portfolio of up to 24 royalties and royalty interests (each a “Royalty” and together the “Royalties”) from Newcrest Mining Ltd and certain of its group companies (together “Newcrest”) (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. Twenty-three 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 (“AlphaStream”), a specialist mining royalty and streaming company. The consideration to be paid by Altus for its interest in the Acquisition is US$24.0 million.

 

Highlights:

• Acquisition of a gold focussed portfolio of cash paying Royalties in Australia and Africa  

• Altus’ effective interest in the Royalty portfolio to be acquired for US$24.0 million from Newcrest  

• Key rationale for the Acquisition includes: 

  • ooImmediate cashflows: Potential US$3.5 million pa (post tax) revenue to Altus based on a forecast 10 year average 

  • ooRobust royalty portfolio: Royalties over two producing mines, one near producing mine and up to 21 development and exploration stage assets 

  • ooGlobal footprint: up to 23 royalties located in Australia, a tier-1 jurisdiction 

  • ooStrong momentum: Second material royalty transaction for Altus in the last four months 

• Royalties in Australia to be acquired through a newly incorporated Australian company ultimately owned 80.1% by Altus and 19.9% by AlphaStream  

• Royalty in Côte d’Ivoire to be acquired through a newly incorporated United Arab Emirates (“UAE”)company owned 50% by Altus and 50% by AlphaStream 

• Altus’ interest in the Royalties to be financed through a proposed placing and subscription of newly issued ordinary shares of nominal value £0.05 ("Ordinary Shares") in the capital of the Company to be announced shortly ("Fundraise")  

• Strong growth trajectory with a pipeline of additional royalty acquisition opportunities under review 

 

Steve Poulton, Chief Executive of Altus, commented:

“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. 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.

 

“I look forward to updating shareholders on the progress of the Acquisition and Fundraise in due course.”

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.”

 

Structure of Acquisition

The Royalties are being acquired in partnership with AlphaStream, a private mining royalty and streaming company incorporated in the Abu Dhabi Global Market. The Company’s portion of the Acquisition will be financed through a proposed placing and subscription of newly issued Ordinary Shares in the capital of the Company.

 

• --For the purposes of the Acquisition of the Royalty in Côte d’Ivoire, Altus and Alphastream have incorporated a private special purpose vehicle (“SPV”) in the UAE (Alpha 2 SPV Limited”) which is owned jointly 50% by Altus Royalties Mauritius Limited (a 100% owned subsidiary of Altus) and 50% by AlphaStream (“Bonikro SPV”). Altus Royalties Mauritius Limited and Alpha 1 SPV Limited (as shareholders) and Alpha 2 SPV Limited today entered into a subscription and shareholders agreement which governs the operation of the Bonikro SPV including certain matters requiring unanimous shareholder approval, the procedure for appointment of nominated directors, rights of first refusal on share transfers, a restriction on either party pledging the shares without consent and forced transfer provisions on an insolvency event (at fair value) or following a material breach which is not remedied (at a discount to fair value). In addition, the parties have agreed that the shareholders will, prior to closing of the Acquisition, subscribe for additional shares in Alpha 2 SPV Limited to provide it with the funding for the Acquisition pro rata to their existing holdings. 

 

• --For the purposes of the acquisition of the Australian Royalties, Altus and Alphastream have incorporated a private SPV in the UAE (“Alpha 3 SPV Limited”) which is owned jointly 80.1% by Altus Royalties Australia Limited (a 100% owned subsidiary of Altus) and 19.9% by Alphastream. Alpha 3 SPV Limited has in turn incorporated a 100% owned Australian subsidiary (“Alcrest Royalties Australia Pty Ltd”)  (“Australian SPV”). Altus Royalties Australia Limited and Alpha 1 SPV Limited (as shareholders) and Alpha 3 SPV Limited today entered into a subscription and shareholders agreement on substantially the same terms as for the Bonikro SPV. In addition, the parties have agreed that the shareholders will, prior to the relevant phase of the closing of the Acquisition, subscribe for additional shares Alpha 3 SPV Limited to provide, pro rata to their existing holdings, it with the funding for it to enable Alcrest Royalties Australia Pty Ltd to fund the Acquisition. 

  

As Alphastream holds a legal and beneficial interest in 50% of the voting rights in Alpha 2 SPV Limited and 19.9% of the voting rights in Alpha 3 SPV Limited, both of which are subsidiaries of Altus, Alphastream is deemed to be a related party of Altus under the AIM Rules for Companies.

Accordingly, the subscription of US$10m in Alpha 2 SPV Limited and the subscription of US$3,482,500 in Alpha 3 SPV Limited by Alphastream are deemed to be related party transactions pursuant to AIM Rule 13.

The directors of Altus consider, having consulted with its nominated adviser, that the terms of the transaction are fair and reasonable insofar as its shareholders are concerned.

 

Royalty Sale and Purchase Agreements

The Bonikro SPV has today entered into a royalty sale and purchase agreement (“Bonikro SPA”) with Newcrest Operations Limited and Newcrest West Africa Holdings Pty Ltd (subsidiaries of Newcrest) and Altus and Alphastream (as guarantors) to acquire the 4.5% net smelter return (“NSR”) royalty on the Bonikro gold mine in Côte d'Ivoire (as further described below).

 

The total consideration payable by Bonikro SPV under the Bonikro SPA is US$20,000,000 of which Altus will contribute US$10,000,000. Closing of the Bonikro SPA is conditional upon the Company completing the Fundraise and will occur contemporaneously with the Phase 1 closing under the Australian SPA within five business days of admission to trading on AIM of the Company’s new Ordinary Shares to be issued under the Fundraise.

 

The Australian SPV has today entered into a royalty sale and purchase agreement with Newcrest, Newcrest Operations Limited, Newcrest West Africa Holdings Pty Ltd and Niugini Mining (Australia) Pty Ltd and Altus and Alphastream (as guarantors) to acquire the portfolio of royalties in Australia, comprising two producing mines, 15 development stage projects and six exploration stage assets (as further described below) as well as certain accrued royalty payments under the Ballarat Gold Mine royalty.

 

The total consideration payable by Australian SPV under the Australian SPA is US$17,500,000 payable in two phases. Closing of phase 1 under the Australian SPA is conditional upon the Company completing the Fundraise and will occur contemporaneously with the closing under the Bonikro SPA. The consideration payable by Australian SPV on closing of phase 1 is US$12,462,500 of which Altus will contribute US$9,982,463.

 

Closing of phase 2 under the Australian SPA is conditional upon the expiration of offer periods and/or the exercise or waiver of certain rights of first refusal (“ROFR”) and rights of first offer (“ROFO”) by royalty payers in relation to nine Royalties in the Australian portfolio (two royalties being subject to a ROFR and seven royalties being subject to a ROFO) . The phase 2 purchase price is a maximum of US$5,037,500 of which Altus will contribute up to US$4,035,037 and may be reduced (by up to US$2m) if either ROFR is exercised.

 

The total consideration payable under the two SPAs is US$37.5 million ("Total Consideration"), of which, the total maximum consideration payable under the two SPAs by Altus is US$24,017,500.

 

Upon closing, Altus will own an effective 50% economic interest in the royalty on the Bonikro gold mine and an effective 80.1% economic interest in the Australian royalty portfolio. In the year ended 31 December 2020, the Australian royalty portfolio generated attributable after-tax revenue of US$0.6 million. The Acquisition is expected to generate attributable after-tax revenue to Altus of approximately US$3.5 million pa over the next 10 years based on internal assumptions. This is based on production forecasts provided by the seller and a sliding scale gold price based on consensus pricing as at September 2021 (“Altus Assumptions”) of:

• 2022 - US$1,879/oz 

• 2023 – US$1,765/oz 

• 2024 – US$1,712/oz 

• 2025+ -  US$1,599/oz 

Altus will have the right to receive future royalty payments made after the respective closing date, with a pro rata apportionment for any royalty payment periods within which the closing occurs.

 

The Australian SPA and Bonikro SPA contain customary warranties, subject to limitations and can be terminated in certain specified circumstances including insolvency and non-compliance with laws provided that if Phase 1 closing has occurred under the Australian SPA such termination only applies to Phase 2 closing.  

 

Royalty Portfolio Post Acquisition

Following completion of the Acquisition in full, Altus’s global portfolio will comprise 33 royalties and 27 projects interests, across nine countries and nine separate metals. The Company’s consolidated royalty portfolio is expected to generate US$6.4 million in annual (after tax) royalty revenue for 2022 (actual results may vary and remain subject, among other factors, to the gold price remaining stable and the projects achieving their modelled operating performance during the period, see “Forward Looking Information”) based on Altus Assumptions.

 

About the Newcrest Royalty Portfolio

The portfolio of royalties to be acquired from Newcrest includes two cash paying royalties, namely the Ballarat gold mine and South Kalgoorlie Operations gold mine in Australia and the near producing Bonikro gold mine in Côte d'Ivoire (see Table 1). The portfolio also includes up to 15 development and six exploration stage royalties in Australia. Many of the Australian royalties are located on assets in known gold mining districts, including the Eastern Goldfields, the Pilbara, the Mt Isa inlier, and the Lachlan Fold Belt. The operators of the projects, include high quality precious and base metal operators very well known to the market.

 

Royalties on Producing Mines

 

Table 1: Royalties on Producing Mines

 

	Asset	Royalty	Location	Operator
1	Bonikro (Push Back 5)	*4.5% NSR	Ivory Coast	Allied Gold
2	Ballarat	2.5% NSR	Australia	Shen Yao Holdings
3	SKO	AUD$10/oz	Australia	Northern Star

*At current gold prices. The royalty is subject to a sliding scale based on the gold price.

 

Bonikro Gold Mine (Côte d'Ivoire): 4.5% Net Smelter Return (“NSR”)

Located in Côte d'Ivoire, Bonikro is an open pit gold mine operated by private company, Allied Gold Corp, and has a proven operating history as a high-quality gold mine in West Africa. Since commercial production commenced in 2008, the mine has produced over 1 million ounces (“oz”) of gold and is expected to produce in excess of the royalty cap (560,000 oz), which represents approximately 56% of Bonikro’s remaining resources. Altus understands that Allied Gold has started to develop the next push back of the open pit (“PB5”) and is targeting a ramp up to nameplate production of 100,000 oz per annum (“pa”) in 1Q 2023.

 

It is estimated that Bonikro contains 10.0 million tonnes (“Mt”) of probable reserves at a grade of 1.2 grams per ton (“g/t”) (430,000 oz of gold), and 18 Mt of total resources at a grade of 1.3 g/t (770,000 oz of gold)1.

 

Pursuant to the Acquisition, Altus will own a 50% interest in a NSR royalty on the Bonikro mine at a rate of 4.50% (at current gold prices, subject to a sliding scale), capped at 560,000oz from PB5.

 

Table 2: Sliding Scale Bonikro Royalty

 

USD Gold Price	Applicable NSR Royalty
US$1,250 or less	0.00%
US$1,251to US$1,299	2.50%
US$1,300 to US$1,349	3.00%
US$1,350 to US$1,399	3.50%
US$1,400 to US$1,449	4.00%
US$1,450 and above	4.50%

 

The royalty interest is projected to generate US$2.4 million in average annual after-tax cash-flows to Altus over 8 years (actual results may vary and remain subject, among other factors, to the gold price remaining stable and the project achieving its modelled operating performance during the period see “Forward Looking Information”).

 

Ballarat Gold Mine (Australia): 2.5% NSR

Located in Victoria, Australia, Ballarat is an underground gold mine operated by Shen Yao Holdings, a Singapore-listed public company. The mine has a historical production rate of approximately 40,000 oz pa2 and a proven record of resource replacement. The mine has produced over 300,000 oz at an average grade of 5.7 g/t since operation re-commenced in 2011 and has an estimated mine life of 13 years remaining based on the current resource and Altus assumptions.

 

The mine is estimated to have resources of 2.9 Mt of indicated resources at a grade of 6.0 g/t totalling (558,000 oz of gold) and 1.5 Mt of inferred resources at a grade of 5.7 g/t (275,000 oz of gold).3

 

Pursuant to the Acquisition, Altus will hold an 80.1% interest in the NSR royalty on the Ballarat mine at a royalty rate of 2.50% and hold ownership over US$1 million in accrued royalty payments. The royalty interest is projected to generate US$1.3 million in average annual after-tax cash-flows to Altus over 13 years (actual results may vary and remain subject, among other factors, to the gold price remaining stable and the project achieving its modelled operating performance during the period, see “Forward Looking Information”).

 

Altus is aware that the Ballarat operator’s management has recently changed and the operator is undergoing a review process with Australian regulators. Key risks have been incorporated into the calculation of the purchase price accordingly and Altus will continue to monitor the situation closely.

 

South Kalgoorlie Operations (“SKO”) (Australia): US$10/oz fixed royalty

Located in Kalgoorlie, Western Australia, SKO is an underground gold mine operated by Northern Star Resources Limited. The mine has a long history of stable production, exploration success, and consistent royalty receipts. The mine comprises part of Northern Star’s wider Kalgoorlie operations which have targeted production of 40,000 oz pa with an expected 18 year mine life based on Altus assumptions.

 

SKO’s large resource base has had a record of consistent resource conversion with a reserve life of four to six years over the past five years. The royalty agreement covers various areas of the mine which is estimated to have reserves of 1.5 Mt of indicated resources at a grade of 3.5 g/t (173,000 oz of gold) and 10 Mt of Measured resources at a grade of 3.0 g/t (1,030,000 oz of gold) and Indicated Resources of 9.4 million tonnes on M&I at a grade of 3.0g/t (903,000 oz of gold)4.

 

Pursuant to the Acquisition, Altus will hold an 80.1% interest in NSR royalty on the SKO mine at a royalty rate of US$10/oz produced along with a discovery bonus of A$1 million for each new ore body on the royalty tenement package with a reserve greater than 250,000 oz of gold. The royalty interest is projected to generate US$220,000 in average annual after-tax cash-flows to Altus over 18 years (actual results may vary and remain subject, among other factors, to the gold price remaining stable and the project achieving its modelled operating performance during the period, see “Forward Looking Information”).

 

Royalties on Development & Exploration Stage Projects

In addition to the cash paying royalties described above, the Acquisition includes a portfolio of royalties across 21 development and exploration stage projects in Australia (see table 3), including several which cover large land positions in marquee mining districts and which are owned by quality operators, such as Northern Star, Goldfields, Zijin, Evolution, BHP, JX Nippon, and Silver Lake. The portfolio is primarily on gold assets with by-products in the form of copper, iron ore and uranium.

   

Table 3: List of Exploration and Development Royalties

 

	Asset	Royalty	Location
1	Mungana	3% GR	QLD
2	Wudinna (Minnipa)	1.5% NSR	SA
3	Gidginbung	2% NSR	NSW
4	Zuleika South/Rose Hill	A$10/oz	WA
5	Randalls	$1/oz	QLD
6	Mt Isa (Brightlands)	2% NSR	WA
7	Ashburton	2.5% GSR	WA
8	Bullfinch*	10% NPI	WA
9	Mulgarrie	1.2% GR for gold	WA
		1.2% NSR (other minerals)
10	Hampton Nickel	A$10/oz	WA
11	Rosetta	3% NSR	QLD
12	Cannindah	0.9% NSR	QLD
13	Mount Wall	1% GSR	WA
14	Mertondale	2% NSR	WA
15	Bill’s Find	Sliding scale	WA
16	Kintore	Various	WA
17	Mt Success*	0.381% NSR	QLD
18	Mayfield	2% NSR	QLD
19	Nupower	0.9% NSR	NT
20	Mt Isa (Others)	2% NSR	WA
21	Kunanalling	3.64% GR	WA

 

Note: NSR means Net Smelter Return Royalty, GR means Gross Production Royalty, GSR means Gross Smelter Royalty, and NPI means Net Profit Interest.  *subject to ROFR or ROFO.

 

Recently, there have been several positive developments within the exploration and development royalty portfolio:

• Cannindah: drill hole results included 1.28% of copper equivalent over 282 meters in November 2021 

• Mungana: mine is on care and maintenance, key shareholder acquired gold complex for US$30M 

• Wudinna: drill hole of 3 g/t of gold over 30 meters 

 

Company Strategy

Altus has successfully delivered on a key objective for the year, with the acquisition of the Caserones copper royalty and this proposed acquisition of interests in the Newcrest gold royalty portfolio. These acquisitions should provide the Company with a high-quality pipeline of cash paying royalties and future revenue growth potential. The Company will continue to seek accretive royalty acquisitions and is actively reviewing a number of such opportunities. Growth will continue to be realised through a combination of low-cost royalty generation and accretive acquisition strategies minimising shareholder dilution.

 

Royalty generation through the exploration and discovery strategy remains fundamental to the Company’s business model. Under this strategy, Altus seeks to make mineral discoveries and monetise them with third parties, through joint ventures, asset sales or other such processes whilst retaining a long-term royalty on each asset providing exposure to the outsized returns that can be achieved following a significant discovery of a commercial mineral deposit.

 

It is intended that the Company will retain profits for reinvestment into attractive and value accretive transactions, to assist the Company in achieving the appropriate scale and cashflow to support a sustainable, long-term dividend. Payment of dividends on the Ordinary Shares will be at the discretion of the Board and will depend upon the Company’s future earnings, cash flows, capital requirements, financial condition and other relevant factors and there can be no assurance that the Company will pay dividends.

 

For further information, you are invited to visit the Company’s website www.altus-strategies.com or contact:

 

Altus Strategies Plc Steven Poulton, Chief Executive	Tel: +44 (0) 1235 511 767 E-mail: info@altus-strategies.com
SP Angel Corporate Finance LLP (Nominated Adviser) Richard Morrison / Adam Cowl	Tel: +44 (0) 20 3470 0470
SP Angel Corporate Finance LLP (Broker) Grant Barker / Rob Rees	Tel: +44 (0) 20 3470 0471
Shard Capital (Broker) Isabella Pierre / Damon Heath	Tel: +44 (0) 20 7186 9927
Yellow Jersey PR (Financial PR & IR) Charles Goodwin / Henry Wilkinson	Tel: +44 (0) 20 3004 9512 E-mail: altus@yellowjerseypr.com

 

About Altus Strategies Plc

Altus Strategies (AIM: ALS, TSX-V: ALTS & OTCQX: ALTUF) is a mining royalty company generating a diversified and precious metal focused portfolio of assets. The Company’s differentiated approach of generating royalties on its own discoveries in Africa and acquiring royalties globally through financings and acquisitions with third parties, has attracted key institutional investor backing. The Company engages constructively with all stakeholders, working diligently to minimise its environmental impact and to promote positive economic and social outcomes in the communities where it operates. For further information, please visit www.altus-strategies.com.

 

Qualified Person:

The technical disclosure in this Announcement has been approved by Steven Poulton, Chief Executive of Altus. A graduate of the University of Southampton in Geology (Hons), he also holds a Master's degree from the Camborne School of Mines (Exeter University) in Mining Geology. He is a Fellow of the Institute of Materials, Minerals and Mining and has over 20 years of experience in mineral exploration and is a Qualified Person under the AIM rules and National Instrument 43-101 Standards of Disclosure for Mineral Projects of the Canadian securities administrators.

 

TSX Venture Exchange Disclaimer

Neither the TSX Venture Exchange nor the Investment Industry Regulatory Organisation of Canada accepts responsibility for the adequacy or accuracy of this release.

 

Market Abuse Regulation Disclosure

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

 

Forward Looking Information

This announcement contains statements which constitute “forward-looking information”, including statements regarding the plans, intentions, beliefs and current expectations of the Company with respect to the future business activities and operating performance of the Company. The words “may”, “would”, “could”, “will”, “intend”, “plan”, “project”, “anticipate”, “believe”, “estimate”, “expect” and similar expressions, as they relate to the Company, or its management, are intended to identify such forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of future business activities or performance and involve risks and uncertainties, and that the Company’s future business activities may differ materially from those in the forward-looking statements as a result of various factors. Such risks, uncertainties and factors are described in the periodic filings with the Canadian securities regulatory authorities, including the Company’s quarterly and annual Management’s Discussion & Analysis, which may be viewed on SEDAR at www.sedar.com. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although the Company has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not be as anticipated, estimated or intended. The Company does not intend, and does not assume any obligation, to update these forward-looking statements other than as may be required by applicable law.

IMPORTANT NOTICES

 

THIS ANNOUNCEMENT (THIS "ANNOUNCEMENT") IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR FORM ANY PART OF AN OFFER TO SELL OR ISSUE, OR A SOLICITATION OF AN OFFER TO BUY, SUBSCRIBE FOR OR OTHERWISE ACQUIRE ANY SECURITIES IN THE UNITED STATES, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NO PUBLIC OFFERING OF THE FUNDRAISE SHARES IS BEING MADE IN ANY SUCH JURISDICTION. ANY FAILURE TO COMPLY WITH THESE RESTRICTIONS MAY CONSTITUTE A VIOLATION OF THE SECURITIES LAWS OF SUCH JURISDICTIONS.

 

This Announcement is not for public release, publication or distribution, in whole or in part, directly or indirectly, in or into the United States, Australia, the Republic of South Africa, Japan or any other jurisdiction in which such release, publication or distribution would be unlawful.

 

No action has been taken by the Company, BMO Capital Markets Limited, SP Angel Corporate Finance LLP or Shard Capital Partners LLP (the “Banks”) or any of their respective affiliates, or any of its or their respective directors, officers, partners, employees, advisers and/or agents (collectively, "Representatives") that would permit an offer of the Placing Shares or possession or distribution of this Announcement or any other publicity material relating to such Placing Shares in any jurisdiction where action for that purpose is required. Persons receiving this Announcement are required to inform themselves about and to observe any restrictions contained in this Announcement. Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of this Announcement should seek appropriate advice before taking any action. Persons distributing any part of this Announcement must satisfy themselves that it is lawful to do so.

 

Resident in the United Kingdom and the EEA

This Announcement is directed at and is only being distributed to: (a) persons in member states of the European Economic Area (the “EEA”) who are "qualified investors", as defined in Article 2(e) of the Prospectus Regulation (Regulation (EU) 2017/1129) (the "Prospectus Regulation") ("Qualified Investors"), (b) persons in the United Kingdom, who are qualified investors, being persons falling within the meaning of Article 2(e) of Prospectus Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 (the "UK Prospectus Regulation"), and who (i) have professional experience in matters relating to investments who fall within the definition of "investment professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"); or (ii) are persons falling within Article 49(2)(a) to (d) (“high net worth companies, unincorporated associations, etc”) of the Order; or; (d) are persons falling within Article 50 ("sophisticated investors") of the Order; or (c) persons to whom it may otherwise be lawfully communicated (each such person in (a), (b), (c) and (d), a "Relevant Person"). This Announcement and the information in it must not be acted on or relied on by persons who are not Relevant Persons. Persons distributing this Announcement must satisfy themselves that it is lawful to do so. Any investment or investment activity to which this Announcement or the Placing relates is available only to Relevant Persons and will be engaged in only with Relevant Persons. This Announcement does not itself constitute an offer for sale or subscription of any securities in the Company.

 

No offering document or prospectus will be made available in any jurisdiction in connection with the matters contained or referred to in this Announcement or the Placing and no such prospectus is required (in accordance with either the Prospectus Regulation or the UK Prospectus Regulation) to be published.

Resident in the United States

 

This Announcement is not for publication or distribution, directly or indirectly, in or into the United States of America. This Announcement is not an offer of securities for sale into the United States. The securities referred to herein have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or with any securities regulatory authority of any state or jurisdiction of the United States, and may not be offered or sold in the United States or to any “US person” (as that term is defined in Regulation S of the US Securities Act), except pursuant to an applicable exemption from the registration requirements of the U.S. Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. No public offering of the Fundraise Shares is being made in the United States or elsewhere.

 

Resident in Canada

 

The securities referred to herein have not been and will not be qualified for distribution or distribution to the public under applicable Canadian securities laws and, accordingly, any sale of the securities will be made on a basis which is exempt from the prospectus requirements of such securities laws. The securities referred to herein are not being offered to and may not be purchased by, or for the benefit of, persons resident in Canada except for “accredited investors” within the meaning of that term in National Instrument 45-106 Prospectus Exemptions, of the Canadian securities administrators (“NI 45-106”). The information included in this Announcement is not intended to, and does not, comply with all of the disclosure requirements that would apply under applicable Canadian securities law if this Fundraise was being qualified pursuant to a prospectus filed with the relevant Canadian securities regulatory authorities. The Fundraise Shares will be subject to a statutory restricted resale / hold period in Canada for a period of four months following the closing of the Fundraise.

 

No securities commission or similar securities regulatory authority in Canada has reviewed or in any way passed upon this Announcement or the contents hereof, or the merits of the Fundraise Shares and any representation to the contrary is an offense under applicable Canadian securities laws.

 

Resident in the Hong Kong

 

This announcement has not been reviewed by any regulatory authority in Hong Kong and it has not been, and will not be, registered as a prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32 of the laws of Hong Kong, the “CWUMPO”), nor has it been authorised by the Securities and Futures Commission pursuant to the Securities and Futures Ordinance (Cap. 571 of the laws of Hong Kong, the “SFO”). Accordingly, the Placing shares have not been and will not be offered or sold in Hong Kong, by means of any document other than (i) to ‘professional investors’ (as defined in the SFO and any rules made under that ordinance) or (ii) in other circumstances which do not result in the document being a 'prospectus' as defined in the CWUMPO or which do not constitute an offer to the public within the meaning of the CWUMPO. No advertisement, invitation or document relating to the Placing shares has been or will be issued, or has been or will be in the possession of any person for the purpose of issue, in Hong Kong or elsewhere that is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to Placing shares that are or are intended to be disposed of only to persons outside Hong Kong or only to professional investors (as defined in the SFO and any rules made under that ordinance). No person to whom Placing shares are issued may sell, or offer to sell, such shares in circumstances that amount to an offer to the public in Hong Kong within six months following the date of issue of such shares. References in this announcement to Hong Kong are to the Hong Kong Special Administrative Region of the People’s Republic of China.

 

Resident in Australia

This announcement is not a disclosure statement or prospectus prepared in accordance with the Corporations Act 2001 (Cth) ("Corporations Act") and does not purport to be complete nor does it contain all of the information that would be required for a disclosure statement or prospectus.  It should be read in conjunction with the Company's other periodic releases. The Fundraise Shares are only available for subscription by residents in Australia who are 'sophisticated investors' within the meaning of section 708(8) of the Corporations Act or 'professional investors' within the meaning of section 708(11) of the Corporations Act and who execute a valid subscription agreement. Any person who is not a sophisticated investor or a professional investor should act or rely on this Announcement or any of its contents.

  

Other Cautions

 

BMO Capital Markets Limited, which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively for the Company and for no one else in connection with the Placing and will not regard any other person (whether or not a recipient of this Announcement) as a client in relation to the Placing or any other matter referred to in this Announcement and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients or for giving advice in relation to the Placing or any other matter referred to in this Announcement.

 

SP Angel Corporate Finance LLP, which is authorised and regulated in the United Kingdom by the FCA, are acting exclusively for the Company and for no one else in connection with the Placing and will not regard any other person (whether or not a recipient of this Announcement) as a client in relation to the Placing or any other matter referred to in this Announcement and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients or for giving advice in relation to the Placing or any other matter referred to in this Announcement. SP Angel Corporate Finance LLP’s responsibilities as the Company's nominated adviser under the AIM Rules for Nominated Advisers are owed solely to the London Stock Exchange and are not owed to the Company or to any Director or to any other person.

 

Shard Capital Partners LLP, which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively for the Company and for no one else in connection with the Placing and will not regard any other person (whether or not a recipient of this Announcement) as a client in relation to the Placing or any other matter referred to in this Announcement and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients or for giving advice in relation to the Placing or any other matter referred to in this Announcement.

 

This Announcement is being issued by and is the sole responsibility of the Company. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by or on behalf of the Banks (apart from the responsibilities or liabilities that may be imposed by the Financial Services and Markets Act 2000, as amended ("FSMA") or the regulatory regime established thereunder) and/or by any of their respective affiliates and/or any of their respective Representatives as to, or in relation to, the accuracy, adequacy, fairness or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or their respective advisers or any other statement made or purported to be made by or on behalf of any of the Banks and/or any of their respective affiliates and/or by any of their respective Representatives in connection with the Company, the Placing Shares or the Placing and any responsibility and liability whether arising in tort, contract or otherwise therefor is expressly disclaimed. No representation or warranty, express or implied, is made by any of the Banks and/or any of their respective affiliates and/or any of their respective Representatives as to the accuracy, fairness, verification, completeness or sufficiency of the information or opinions contained in this Announcement or any other written or oral information made available to or publicly available to any interested party or their respective advisers, and any liability therefor is expressly disclaimed.

 

The information in this Announcement may not be forwarded or distributed to any other person and may not be reproduced in any manner whatsoever. Any forwarding, distribution, reproduction or disclosure of this Announcement, in whole or in part, is unauthorised. Failure to comply with this directive may result in a violation of the U.S. Securities Act or the applicable laws of other jurisdictions.

 

This Announcement does not constitute a recommendation concerning any investor's options with respect to the Placing. Recipients of this Announcement should conduct their own investigation, evaluation and analysis of the business, data and other information described in this Announcement. This Announcement does not identify or suggest, or purport to identify or suggest, the risks (direct or indirect) that may be associated with an investment in the Placing Shares. The price and value of securities can go down as well as up and investors may not get back the full amount invested upon the disposal of the shares. Past performance is not a guide to future performance. The contents of this Announcement are not to be construed as legal, business, financial or tax advice. Each investor or prospective investor should consult his or her or its own legal adviser, business adviser, financial adviser or tax adviser for legal, business, financial or tax advice.

 

Any indication in this Announcement of the price at which the Company's shares have been bought or sold in the past cannot be relied upon as a guide to future performance. Persons needing advice should consult an independent financial adviser. No statement in this Announcement is intended to be a profit forecast or profit estimate for any period and no statement in this Announcement should be interpreted to mean that earnings, earnings per share or income, cash flow from operations or free cash flow for the Company for the current or future financial periods would necessarily match or exceed the historical published earnings, earnings per share or income, cash flow from operations or free cash flow for the Company.

 

All offers of the Placing Shares will be made pursuant to an exemption under the Prospectus Regulation and the UK Prospectus Regulation from the requirement to produce a prospectus. This Announcement is being distributed and communicated to persons in the United Kingdom only in circumstances in which section 21(1) of FSMA does not apply.

 

The Fundraise Shares to be issued pursuant to the Fundraise will not be admitted to trading on any stock exchange other than AIM. The Fundraise Shares will, when issued, form part of the Ordinary Shares currently listed for trading on the TSX-V.

 

Members of the public are not eligible to take part in the Placing and no public offering of Placing Shares is being or will be made.

 

Neither the content of the Company's website (or any other website) nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this Announcement.

 

This Announcement has been prepared for the purposes of complying with applicable law and regulation in the United Kingdom and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws and regulations of any jurisdiction outside the United Kingdom.

   

**END**

THIS ANNOUNCEMENT (THIS "ANNOUNCEMENT") IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR FORM ANY PART OF AN OFFER TO SELL OR ISSUE, OR A SOLICITATION OF AN OFFER TO BUY, SUBSCRIBE FOR OR OTHERWISE ACQUIRE ANY SECURITIES IN THE UNITED STATES, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NO PUBLIC OFFERING OF THE FUNDRAISE SHARES IS BEING MADE IN ANY SUCH JURISDICTION. ANY FAILURE TO COMPLY WITH THESE RESTRICTIONS MAY CONSTITUTE A VIOLATION OF THE SECURITIES LAWS OF SUCH JURISDICTIONS.

 

THIS ANNOUNCEMENT IS NOT FOR PUBLIC RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

 

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 ("MAR") as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018. Upon publication of this announcement, the inside information is now considered to be in the public domain for the purposes of MAR.

1 SNL Metals & Mining Dataset

2 SNL Metals & Mining Dataset

3 Independent Qualified Persons Report for the Ballarat Goldmine, Australia for Shen Yao Holdings Limited – Effective Date 28th Feb 2021 -Table 1.4.2 Mineral Resource estimate of the Ballarat East deposit

4 NST Kalgoorlie Operations FY21 Guidance sourced from Northern Star AGM Presentation (25-Nov-2020)