Mr. Frederick Bell reports

ELEMENTAL ALTUS COMPLETES SALE OF DIBA GOLD PROJECT IN MALI TO ALLIED GOLD FOR ROYALTY AND MILESTONE PAYMENTS

Elemental Altus Royalties Corp. has closed the previously announced sale of the shovel-ready Korali-Sud small-scale mining licence and the highly prospective Lakanfla exploration licence (combined Diba project) to Allied Gold Corp. The project is located approximately 15 kilometres from Allied's Sadiola gold mine in western Mali. Allied has announced its intention to fast-track production at Diba in first half 2024 to complement existing oxide ore sources in the Sadiola mine plan.

Highlights:

• Completion of sale of Diba project in western Mali to Allied for royalty and cash milestone payments;
• Uncapped net smelter return royalty expected to generate material near-term income:
  • 3.0 per cent on first 226,000 ounces of gold produced from the defined Diba deposit;
  • 2.0 per cent on all future production in excess of 226,000 ounces from the project;
• $1-million (U.S.) payable on closing and up to $5-million (U.S.) in deferred production-based milestones;
• Sadiola expected to produce an average of 230,000 ounces over 2024 and 2025 with the addition of Diba:
  • Up to 1.8 million tonnes per year to be trucked 15 km to the Sadiola processing plant;
  • Simple open-pit mining of typically soft ores, with oxidation down to 70 metres;
  • Investment of $12-million (U.S.) in 2023 and 2024 for development including haul road;
• Diba hosts a National Instrument 43-101-compliant preliminary economic assessment, which confirmed a mineral resource estimate of:
  • 312,000 ounces of gold with a grade of 1.24 grams per tonne in the indicated category, including 199,000 ounces of gold in oxides with an average grade of 1.52 g/t;
  • 362,000 ounces of gold at 0.88 g/t in the inferred category;
• Additional excellent potential exists for further expansion beyond the existing MRE within the 107-square-kilometre project area:
  • Historical drill results including 4.78 g/t over 12 m from Diba northwest prospect and 1.23 g/t Au over 127 m from the Lakanfla central prospect;
  • Lakanfla has existing MRE and potential for Yatela-type carbonate-hosted karst targets.

Steven Poulton, executive chairman of Elemental Altus, commented: "We are delighted to close the sale of the strategically located Diba gold project in western Mali to Allied for cash and an uncapped royalty. Allied intends to fast-track Diba into production in the first half of 2024 with the typically soft oxide ores mined by open pit and trucked 15 km by Allied to their [carbon-in-pulp] processing plant at Sadiola. Allied also intends to undertake further exploration at the project, with the objective of increasing the resource and making new discoveries.

"We expect this deal to be highly accretive for the company and contribute meaningfully to Elemental Altus's near-term revenue growth from the initial 3.0-per-cent NSR on the first 226,000 ounces and 2.0 per cent on all further ounces. In addition, Elemental Altus has received $1-million (U.S.) in cash on closing and is entitled to receive further deferred production-based milestone payments of up to $5-million (U.S.)."

Share and purchase agreement key terms and advisers

As announced by the company on July 20, 2023, under the share and purchase agreement, the company has sold its 100-per-cent-owned subsidiary Legend Mali (BVI) III Inc., which indirectly owns 100 per cent of the Korali-Sud and Lakanfla licences in western Mali. The consideration is composed of a 3.0-per-cent NSR royalty on the first 226,000 ounces of production from the Diba deposit at Korali-Sud and a 2.0-per-cent NSR royalty on production thereafter from both Korali-Sud and Lakanfla.

Allied has paid $1-million (U.S.) in cash on closing and will pay a further $1-million (U.S.) 90 days after commercial production or the earlier of Dec. 31, 2025, if commercial production has not occurred. Allied will make a further payment of $2-million (U.S.) within 90 days of production of 100,000 ounces from the Diba deposit and an additional $1-million (U.S.) payment when cumulative production reaches each of 150,000 ounces and then 200,000 ounces from the Diba deposit within Korali-Sud.

Elemental Altus's financial adviser for the transaction was National Bank Financial.

Project location

The 107-square-kilometre Korali-Sud small-scale mining licence and Lakanfla exploration licence are located five km apart in the Kayes region of western Mali along the Senegal-Mali shear zone, approximately 450 km northwest of the capital city of Bamako. The project is contiguous with the multimillion-ounce Sadiola gold mine licence acquired by Allied from the previous operators AngloGold Ashanti and Iamgold Corp. and 35 km south of the multimillion-ounce Yatela former gold mine.

Project geology and mineralization

Korali-Sud small-scale mining licence

Mineralization at the Diba deposit in the Korali-Sud licence is sediment hosted with a series of stacked quartz lenses within sedimentary packages that are typically between 20 and 40 m thick. The lenses are shallow dipping at approximately 30 degrees angled to the east/east-southeast. The Diba deposit is considered to be controlled by a number of northwest- and northeast-oriented structures, with gold occurring as fine-grained disseminations in localized high-grade, calcite-quartz veinlets. Alteration at the Diba deposit is typically albite-hematite plus or minus pyrite, although pyrite content is generally very low (less than 1 per cent). The weathering profile at the Diba deposit is estimated to be up-to-70-metre vertical depth, resulting in extensive oxidation from surface. The oxide gold mineralization at the Diba deposit is predominantly found in saprolite within 50 m of surface and across a compact 700-metre-by-700-metre area.

Lakanfla licence

The Lakanfla licence hosts a significant number of active and historic artisanal gold workings coincident with significant geochemical and gravity anomalies. The workings surround the Kantela granodiorite intrusion and cover an area of approximately 900 m by 500 m. The gold mineralization at Lakanfla is typically hosted within breccia zones, which cut the granodiorite and surrounding carbonate metasediments similar to the Sadiola and Yatela deposits.

About Elemental Altus Royalties Corp.

Elemental Altus is a revenue-generating precious metal royalty company with 10 producing royalties and a diversified portfolio of preproduction 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.

Qualified person

Steven Poulton, executive chairman for Elemental Altus, a qualified person under National Instrument 43-101 (Standards of Disclosure for Mineral Projects), has reviewed and approved the scientific and technical disclosure contained in this press release.

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