Elemental Royalties Corp Announces Recommended All-Share Merger of Equals

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

VANCOUVER, BC / ACCESSWIRE / June 14, 2022 /

RECOMMENDED ALL-SHARE MERGER OF EQUALS
OF
ALTUS STRATEGIES PLC
AND
ELEMENTAL ROYALTIES CORP.

to be applied by way of a scheme of association
underneath Half 26 of the Firms Act 2006

Abstract

The boards of Elemental Royalties Corp. (ELE.V) (“Elemental“) and Altus Methods plc (ALTS.V) (“Altus“) are happy to announce they’ve reached settlement on the phrases and circumstances of a really helpful share-for-share merger of equals of Elemental and Altus with your entire issued and to be issued share capital of Altus being acquired by Elemental (the “Merger“). It’s meant that the Merger might be applied by means of a court-sanctioned scheme of association underneath Half 26 of the Firms Act 2006.

Underneath the phrases of the Merger, every Altus Shareholder might be entitled to obtain:

0.5940 New Elemental Shares for every Altus Share

This trade ratio (the “Trade Ratio“) has been agreed between the boards of Elemental and Altus taking into consideration the relative market capitalisations of each corporations.

Upon completion of the Merger, Elemental Shareholders will personal roughly 52.9 per cent. and Altus Shareholders will personal roughly 47.1 per cent. of the overall issued share capital of the New Elemental Altus Group (based mostly on the undiluted issued share capital of Elemental and Altus on the Final Practicable Date).

The boards of Elemental and Altus consider that the Merger has compelling strategic logic and represents a gorgeous alternative for each corporations to create a world gold royalty firm.

Background to and causes for the Merger

Substantial advantages for all Altus and Elemental stakeholders on account of the creation of the New Elemental Altus Group

The Elemental Administrators and Altus Administrators consider that the creation of the New Elemental Altus Group will ship substantial advantages for all stakeholders of each Elemental and Altus, together with:

Elevated scale and diversification: a mixed portfolio of 69 property throughout 13 jurisdictions, concentrated in tier-1 mining jurisdictions, of which 11 are in manufacturing, and primarily centered on gold;Remodeled adjusted income profile: estimated mixed adjusted 2022 income of the New Elemental Altus Group of US$19.6 million with important close to time period progress potential from first anticipated income from Ming, Bonikro and Mercedes in 2022 estimated to result in mixed adjusted 2023 income of the New Elemental Altus Group of US$24.6 million, mixed with alternatives so as to add additional portfolio income and length*;

* see “Non-IFRS monetary measures – (i) Adjusted Income” under. The sources and bases for the calculation of the estimated mixed New Elemental Altus Group adjusted income for FY 2022 and 2023 are set out in Appendix 2.

Strengthened asset portfolio: centred round 3 cornerstone royalties, nearly all of the New Elemental Altus Group’s NAV might be based mostly on producing property, offering buyers with publicity to the highest line income of underlying property (with out direct publicity to the working prices / capex of these property and related inflationary dangers) whereas protecting lengthy dated optionality from current growth pipeline and natural royalty era portfolio;Robust shareholder help: recognised strategic buyers have supported the Merger, in La Mancha and Condire having supplied shareholder irrevocable undertakings over 44.6 per cent. of Altus’s issued share capital; and South32 and La Mancha having entered into voting and help agreements in respect of 25.96 per cent. of Elemental’s issued share capital. Moreover, EuroPacific Asset Administration and Adrian Day Asset Administration have supplied letters of intent to vote in favour of the Elemental Shareholder Decision in respect of an extra 10.42 per cent. of Elemental’s issued share capital;Enhanced capital markets profile: elevated scale and liquidity for enhanced market relevance and monetary flexibility and a decrease value of capital, with wider investor attraction, analyst protection and M&A possible coming with a bigger market capitalisation; offering the chance for a re-rating of the shares of the New Elemental Altus Group;Complementary administration abilities: an skilled administration group with Elemental’s confirmed historical past of accretive royalty acquisitions being a pure match to the disciplined royalty era and royalty acquisition monitor report of Altus;Potential value synergies: alternative to ship value effectivity synergies on the company degree by simplification of operations and listings; andCanadian tax election: the disposition of Altus Shares on the Merger by a Canadian resident holder will represent a taxable disposition for functions of the Earnings Tax Act (Canada) (the “Tax Act“) ensuing within the realisation of any accrued achieve that the holder could have within the Altus Shares. Elemental will allow an ‘eligible holder’ to partially or absolutely defer a achieve that may in any other case be realised, if any, by making a joint election with Elemental pursuant to part 85 of the Tax Act (in accordance with all relevant guidelines). An ‘eligible holder’ refers to (i) an individual who’s resident in Canada and never exempt from tax underneath Half I of the Tax Act or (ii) a ‘Canadian partnership’ no member of which is exempt from tax underneath Half I of the Tax Act.

Honest worth for each units of shareholders

The Trade Ratio has been agreed between the boards of Elemental and Altus taking into consideration the relative market capitalisations of each corporations and provides truthful worth for each units of shareholders in step with valuations anticipated in an all-share merger of equals.

Key Highlights of the Merger

Upon completion of the Merger, it’s meant that:

An eight (8) member board might be constituted from a mixture of current administrators from each Elemental and Altus (together with 4 (4) Elemental representatives and 4 (4) Altus representatives);Steven Poulton, present CEO of Altus, might be appointed as Government Chair and Frederick Bell, present CEO of Elemental, might be appointed as Chief Government Officer;Martin Turenne, a present non-executive director of Elemental, might be appointed as Chair of the Audit Committee and Robert Milroy, a present non-executive director of Altus, might be appointed as Chair of the Compensation Committee;After the Merger, Elemental will proceed to be listed on TSX-V and might be headquartered in Vancouver, Canada and have groups situated in Canada, the UK and Australia; andElemental’s identify might be modified to Elemental Altus Royalties Corp. shortly after Completion.

Altus Suggestion and Irrevocable Undertakings

The Altus Administrators, who’ve been so suggested by UBS AG London Department (“UBS“) as to the monetary phrases of the Merger, unanimously take into account the phrases of the Merger to be truthful and cheap. In offering its recommendation to the Altus Administrators, UBS has taken under consideration the industrial assessments of the Altus Administrators. UBS is offering impartial monetary recommendation to the Altus Administrators for the needs of Rule 3 of the Takeover Code.

Accordingly, the Altus Administrators intend to advocate unanimously that (a) Scheme Shareholders vote in favour of the Scheme on the Altus Courtroom Assembly; and (b) Altus Shareholders vote in favour of the Particular Decision to be proposed on the Altus Basic Assembly, because the Altus Administrators who’re fascinated about Altus Shares have irrevocably undertaken to do in respect of their very own helpful holdings (and people of their related individuals) in respect of which they management the voting rights amounting to fifteen,550,327 Altus Shares representing, in mixture, roughly 13.25 per cent. of the abnormal share capital of Altus in situation on the Final Practicable Date.

Along with the irrevocable undertakings from Altus Administrators described above, Elemental has additionally acquired irrevocable undertakings to vote (or, the place relevant, procure voting) in favour of the Scheme on the Altus Courtroom Assembly and the Particular Decision to be proposed on the Altus Basic Assembly (or within the occasion that the Merger is applied by an Provide, to simply accept or procure acceptance of such Provide) from:

La Mancha Explorers; andCondire Useful resource Grasp Partnership, LP,

in respect of 41,158,454 and 11,170,102 Altus Shares, respectively, representing in mixture roughly 44.6 per cent. of the prevailing issued abnormal share capital of Altus and 44.6 per cent. of the Scheme Shares being eligible to vote on the Altus Courtroom Assembly, in every case, as on the Final Practicable Date.

Due to this fact, Elemental has acquired irrevocable undertakings in respect of, in mixture, 67,878,883 Altus Shares, representing roughly 57.9 per cent. of the Altus Shares in situation on the Final Practicable Date.

Additional particulars of the irrevocable undertakings are set out in paragraph 8 of this Announcement.

Elemental Suggestion, Voting and Assist Agreements, Letters of Intent and Break Cost

The issuance of the New Elemental Shares pursuant to the Merger requires the Elemental Shareholder Decision to be accredited by a easy majority of the votes solid by Elemental Shareholders represented in particular person or by proxy on the Elemental Particular Assembly.

The Elemental Administrators, after an intensive assessment and thorough dialogue of all info and points they thought of related with respect to the Merger, unanimously decided that the issuance of the New Elemental Shares pursuant to the Merger is truthful to the Elemental Shareholders, and authorised Elemental to enter into the Co-operation Settlement and advocate to Elemental Shareholders that they vote in favour of the Elemental Shareholder Decision. In reference to making this dedication, on 13 June 2022 the Elemental Administrators acquired a equity opinion from Canaccord Genuity Corp. to the impact that, as of such date, and topic to the analyses, elements, assumptions, {qualifications} and limitations set forth in such opinion, the Trade Ratio is truthful, from a monetary standpoint, to Elemental Shareholders. The complete textual content of Canaccord Genuity Corp.’s equity opinion might be included within the Elemental Info Round.

The Elemental Administrators who’re fascinated about Elemental Shares and sure shareholders of Elemental have agreed to vote their very own shareholdings in Elemental representing 11,207,575 Elemental Shares, being roughly 14.32 per cent. of the Elemental Shares in situation on the Final Practicable Date, in favour of the Elemental Shareholder Decision.

Along with the voting and help agreements with the Elemental Administrators and sure workers of Elemental who’re fascinated about Elemental Shares, Altus has additionally entered into voting and help agreements to vote in favour of the Elemental Shareholder Decision on the Elemental Particular Assembly with:

La Mancha Investments; andSouth32,

in respect of seven,250,000 and 13,065,100 Elemental Shares, respectively, representing in mixture roughly 25.96 per cent. of the Elemental Shares in situation on the Final Practicable Date in favour of the Elemental Shareholder Decision.

EuroPacific Asset Administration and Adrian Day Asset Administration have additionally given non-binding letters of intent to vote (or, the place relevant, procure voting) in favour of the Elemental Shareholder Decision on the Elemental Particular Assembly in respect of an extra 6,296,529 and 1,861,700 Elemental Shares respectively, representing roughly 10.42 per cent. of the Elemental Shares in situation on the Final Practicable Date.

Due to this fact, Altus has acquired voting undertakings and letters of intent in respect of, in mixture, 39,680,904 Elemental Shares, representing roughly 50.7 per cent. of the Elemental Shares in situation on the Final Practicable Date.

Additional particulars of the voting and help agreements and letters of intent are set out in paragraph 8 of this Announcement.

Elemental has agreed to pay to Altus a break cost within the quantity of US$2,000,000 in sure circumstances, as agreed within the Co-operation Settlement and described additional in paragraph 9.3 of this Announcement.

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SOURCE: Elemental Royalties Corp

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