Altus completes first closing of Casarones royalty interest

Altus Strategies has completed the first closing of its recently-announced agreement to acquire an effective 0.418% net smelter return royalty (NSR) interest on the producing Caserones Copper Mine in Chile’s Atacama region on Monday.

The AIM-traded firm is acquiring the NSR interest for $34.1m (£24.97m) through a strategic 50-50 partnership with TSX-V and NYSE American-listed EMX Royalty Corporation.

Altus and EMX have created a special purpose vehicle incorporated in Chile that is owned jointly by the companies.

On completion of the acquisition, the vehicle would have acquired an effective 0.836% NSR for $68.2m.

Altus said it was principally financing the acquisition with a $29m acquisition loan facility agreement provided by La Mancha Fund.

Under the first closing, Altus said an initial 76% of the 0.418% NSR interest had been acquired for $26.15m, with the final closing of the remaining 24% interest to occur on 1 September.

The NSR interest was expected to generate cash flow of $3.2m per year after tax to Altus.

It said Caserones had been operating since 2015, with 17 years of mine life remaining, while the board added that additional royalty transactions were under review globally, with a focus on gold and copper.

“We are delighted to announce the first closing of a significant cash paying royalty on a long-life copper mine in a tier-1 mining jurisdiction,” said chief executive officer Steven Poulton.

“In addition to our acquisition, it is notable that TSX-listed Nomad Royalty Company, which has a market capitalisation of approximately CAD 440m, has recently agreed to purchase a further 0.351% NSR interest on the Caserones mine, increasing their total effective NSR interest to 0.631%.

“The Nomad transaction underscores the strength of investor interest in this high-quality royalty.”

Poulton said that following the acquisition, Altus would receive “significant” quarterly royalty income, and would 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.”

At 1000 BST, shares in Altus Strategies were up 12.9% at 70p.