Altus Strategies was admitted to trading on the AIM market of the London Stock Exchange last week. The company intends to use the net proceeds from its placing and subscription to fund further exploration across its portfolio of projects in Cameroon, Ethiopia, Morocco and Liberia, for establishing new exploration opportunities and for working capital purposes.
Steven Poulton, Chief Executive of Altus, commented: “Altus operates a fresh, disruptive and entrepreneurial ‘project generator’ business model in the mining sector. Our listing on AIM marks an important milestone for the company as we accelerate our growth through the discovery, acquisition and development of further projects in Africa. We are delighted to welcome our new shareholders to the register.
“With a mantra of ‘explore, discover, repeat’ Altus aims to provide its shareholders with the opportunity to participate in a single venture that has the upside optionality and diversification of several ventures, while benefiting from the efficiency of one experienced and aligned management team. We do this by conducting multiple exploration programs simultaneously, prior to entering joint ventures on our discoveries with industry partners. These partners then fund the more costly and higher risk phases of exploration to earn a majority interest in each project. We may also receive income and equity payments from our partners. This means that unlike traditional juniors, Altus can be dispassionate about individual project outcomes and instead focus on creating long-term value by growing its portfolio of discoveries, while minimising equity dilution.
“Since the cyclical downturn that started in 2011, Altus has established a portfolio of 12 projects, diversified across seven commodities in four countries with two joint venture partners. We look forward to a busy period ahead with the proceeds from the Placing and Subscription being applied towards our active exploration programmes and to growing our portfolio with further discoveries in new jurisdictions in Africa.”
Altus operates a disruptive model that embraces the cyclical nature of the mining sector. The objective is to discover and develop multiple assets in order to reduce risks and enhance returns. This is being achieved through the discovery, acquisition, development and monetisation of a diversified portfolio of mineral deposits in Africa. The company then seeks third party joint venture partners to fund what it considers to be the highest risk phases of exploration, which include drilling and resource definition, in return for an equity interest in the individual projects. This approach is designed to provide the upside optionality of multiple juniors with the efficiency of a single management team who have a proven track record. By financing and diluting at project level through joint ventures, the company also aims to reduce its reliance on the capital markets for funding. This model is also designed to more closely align the interests of the company’s management with those of its shareholders.
Diversification is the key feature to the company’s business model, meaning it is not dependent on any one asset or project, nor is it overly exposed to any one jurisdiction or the price volatility of any one commodity. The company believes this model reduces risks and allows its management to be commercially disciplined when making strategic exploration decisions for allocating shareholder capital. By operating with one fixed and relatively streamlined overhead, Altus believes that money can be spent more efficiently on multiple projects. This in turn allows more targets to be tested per exploration dollar invested thereby increasing the likelihood of exploration success. This also means the time and cost to make and test discoveries can potentially be greatly reduced.
The area of focus is Africa, where the company’s management team possesses significant expertise and has demonstrated that discoveries can be made rapidly and cost effectively at surface. Going forward, Altus intends to monetise its project interests at substantial premiums to the capital invested. Thereafter when the market experiences a downturn again, Altus will have an opportunity to accelerate its ‘land-banking’ strategies, in preparation for the next upswing.
