Highlights
Up to
Outstanding debt reduced to
Materially decreases the Company's cost of capital and improves access to credit going forward
Company in a strong position to transact on further accretive royalties and stream opportunities
La Mancha has increased its shareholding in the Company to approximately 34.3% prior to proposed Financing
'This refinancing marks a key turning point in the growth of the business as we significantly lower our cost of capital, while increasing our ability to grow through accretive transactions. By reducing our overall indebtedness, with the repayment of Sprott and the conversion of debt by La Mancha, we are also ensuring the Company continues to generate robust cashflows and is positioned to take advantage through all stages of the cycle. We are grateful for the continued support from our largest shareholder La Mancha who, together with our new lenders
Credit Facility
The Company has entered into an agreement with
Depending on the Company's leverage ratio, the amounts drawn on the Facility are subject to interest at SOFR plus 2.50% - 3.75% per annum and the undrawn portion is subject to a standby fee of 0.56% - 0.84% per annum.
The Company has drawn down an initial
The Facility has been entered into by Elemental Altus as borrower,
Debt Conversion
On
Equity Fundraise
The Financing is in the form of a non-brokered private placement of up to 5,250,000 Shares at a price of
Directors and officers of Elemental Altus have committed to participate in the Financing and on completion of the Financing, Elemental Altus expects to have approximately 182,165,013 Shares issued and outstanding.
Subject to compliance with applicable regulatory requirements and in accordance with National Instrument 45-106 - Prospectus Exemptions ('NI 45-106'), the Shares will be offered for sale to purchasers resident in
There is an offering document related to the Financing that can be accessed under the Company's profile at www.sedar.com and on the Company's website at www.elementalaltus.com. Prospective investors should read this offering document before making an investment decision.
The Financing is expected to close on or about
La Mancha Investor Rights Agreement
Concurrently with closing of the Debt Conversion, LMHE and Elemental Altus entered into an Investor Rights Agreement ('Rights Agreement') that notably includes:
The right for LMHE to nominate a number of directors proportionate to its and its affiliates' ownership interest in the Shares or other voting shares or equity shares of Elemental Altus ('Voting Shares'), rounded down to the nearest whole number, which as of the date hereof is the right to nominate two directors to Elemental Altus's Board;
Anti-dilution and top-up rights allowing LMHE and its affiliates to maintain their ownership interest in the Voting Shares for so long as LMHE and its affiliates' ownership interest in the Voting Shares is at least 15%;
A two-year standstill period and one-year restrictions on disposition period, subject to customary exceptions, and certain provisions to ensure the orderly disposition of any Voting Shares or securities convertible into Voting Shares held by LMHE and its affiliates representing more than 10% of Elemental Altus' then outstanding Voting Shares; and
Customary demand registration and piggy-back registration rights in favour of LMHE and its affiliates, provided that LMHE and its affiliates' ownership interest in the Voting Shares is at least 15%.
Not for distribution to
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in
In addition, as La Mancha owned approximately 21.44% of the Shares prior to the Debt Conversion, the Debt Conversion constituted a related party transaction as defined under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ('MI 61-101'). The Debt Conversion was exempt from the formal valuation requirement of Section 5.4 of MI 61-101 pursuant to Subsection 5.5(b) of MI 61-101, and was exempt from the minority shareholder approval requirement of Section 5.6 of MI 61-101 pursuant to Subsection 5.7(1)(a) of MI 61- 101 as the fair market value of the Debt Conversion and the Shares issued as consideration therefor was not more than 25% of Elemental Altus' market capitalization. A material change report, as contemplated under MI 61-101, was not filed more than 21 days prior to closing as the Debt Conversion was not agreed upon until shortly prior to the closing.
Neither the
Contact:
Corporate & Media
CEO
T: +44 (0) 7554 872 794
E: f.bell@elementalaltus.com
WEB: www.elementalaltus.com
About
Elemental Altus is an income generating precious metals royalty company with 11 producing royalties and a diversified portfolio of pre-production and discovery stage assets. The Company is focused on acquiring uncapped royalties and streams over producing, or near-producing, mines operated by established counterparties, as well as generating royalties on new discoveries. The vision of Elemental Altus is to build a global gold royalty company, offering investors superior exposure to gold with reduced risk and a strong growth profile.
About La Mancha and La Mancha Resource Fund SCSp
La Mancha is a wholly-owned subsidiary of the Fund, a Luxembourg based investment fund advised by
About
Additional Information
For further information on
About the Debt Conversion
On
Prior to the completion of the Issuance, La Mancha and its joint actors owned or had control or direction over an aggregate of 31,721,881 Shares, representing approximately 21.44% of the then issued and outstanding Shares. Following completion of the Issuance, La Mancha and its joint actors beneficially own and have control and direction over an aggregate of 60,681,678 Shares, representing approximately 34.3% of the issued and outstanding Shares. Concurrently with the closing of the Issuance, LMHE and Elemental Altus entered into the Rights Agreement pursuant to which LMHE was granted certain director nomination, anti-dilution and top-up, and registration and piggy-back rights. The Shares acquired by La Mancha on completion of the Issuance will be held for investment purposes. In the future, La Mancha may, from time to time, increase or decrease its investment in Elemental Altus through market transactions, private arrangements, treasury issuances or otherwise, including pursuant to, and subject to, the terms of the Rights Agreement.
Notes
Neither the TSX-V nor its Regulation Service Provider (as that term is defined in the policies of the TSX-V.) accepts responsibility for the adequacy or accuracy of this press release.
Cautionary note regarding forward-looking statements
This news release contains certain 'forward looking statements' and certain 'forward-looking information' as defined under applicable Canadian securities laws. Forward-looking statements and information can generally be identified by the use of forward-looking terminology such as 'may', 'will', 'should', 'expect', 'intend', 'estimate', 'anticipate', 'believe', 'continue', 'plans' or similar terminology.
Forward-looking statements and information include, but are not limited to the ongoing relationship with La Mancha, La Mancha's future investments in the Company, fulfilling closing conditions in connection to the Financing including TSX-V approval, the net proceeds of the Financing being used to fund prospective royalty acquisitions and for general working capital purposes, the Company's directors and officers commitment to invest in the Financing, the date in which the Financing is expected to close, the amount of shares that the Company expects to have issued and outstanding upon completion of the Financing, the future growth, development and focus of the Company, and the acquisition of new royalties and streams. Forward-looking statements and information are based on forecasts of future results, estimates of amounts not yet determinable and assumptions that, while believed by management to be reasonable, are inherently subject to significant business, economic and competitive uncertainties and contingencies.
Forward-looking statements and information are subject to various known and unknown risks and uncertainties, many of which are beyond the ability of Elemental Altus to control or predict, that may cause Elemental Altus' actual results, performance or achievements to be materially different from those expressed or implied thereby, and are developed based on assumptions about such risks, uncertainties and other factors set out herein, including but not limited to: the impact of general business and economic conditions, the absence of control over the mining operations from which Elemental Altus will receive royalties, risks related to international operations, government relations and environmental regulation, the inherent risks involved in the exploration and development of mineral properties; the uncertainties involved in interpreting exploration data; the potential for delays in exploration or development activities; the geology, grade and continuity of mineral deposits; the impact of the COVID-19 pandemic; the possibility that future exploration, development or mining results will not be consistent with Elemental Altus' expectations; accidents, equipment breakdowns, title matters, labour disputes or other unanticipated difficulties or interruptions in operations; fluctuating metal prices; unanticipated costs and expenses; uncertainties relating to the availability and costs of financing needed in the future; the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses, commodity price fluctuations; currency fluctuations; regulatory restrictions, including environmental regulatory restrictions; liability, competition, loss of key employees and other related risks and uncertainties. For a discussion of important factors which could cause actual results to differ from forward-looking statements, refer to the annual information form of Elemental Altus for the year ended
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