Mr. Frederick Bell reports

ELEMENTAL ALTUS NOTES POSITIVE UPDATES AT KEY GROWTH ROYALTIES AND GRANT OF OPTIONS

Elemental Altus Royalties Corp. has provided a portfolio update following operator news releases covering key royalties held by the company and details of the company's options and RSU (restricted share unit) grant.

Highlights:

• Lundin Mining Corp. announced on Feb. 8, 2024, an increased mineral reserve and mineral resource estimates for the Caserones copper-molybdenum mine, more than replacing depleted mineral reserves and increasing mineral resources in the measured and indicated category by over 1.1 million tonnes of contained copper, or an increase of more than 35 per cent:
  • Lundin Mining also recently announced its 2024 guidance of 120,000 to 130,000 tonnes copper for Caserones after excellent Q4 performance, including 35,400 tonnes of copper produced, the first full quarter under new operator Lundin Mining.
• Allied Gold Corp. has recently provided production guidance for its operations. Elemental Altus's royalties on both Diba and Bonikro are expected to be catalysts for near-term revenue growth in the royalty portfolio:
  • First production at the Diba gold deposit in Mali is expected to commence during the first half (H1) of 2024. The project was sold by Elemental Altus to Allied Gold during 2023 for cash, a royalty and a series of staged payments.
  • Allied Gold recently defined an initial mineral reserve at Diba of 6.1 million tonnes at 1.43 grams per tonne (g/t) for 280,000 ounces of gold and announced an approximately 70-per-cent-increased measured and indicated mineral resource of 8.8 million tonnes at 1.33 g/t for 377,000 ounces of gold, inclusive of mineral reserves.
  • At the Bonikro mine in Ivory Coast, the majority of continuing production is expected to come from Elemental Altus's royalty over the coming years. Allied Gold are targeting 95,000 to 105,000 ounces of gold in 2024 and greater than 110,000 ounces per year long term.
• Arizona Sonoran Copper Company Inc. recently announced a prefeasibility study (PFS) on its Cactus mine project, including for the first time the adjoining Parks/Salyer deposit:
  • The PFS defines an open-pit and underground, heap leach, solvent extraction/electrowinning operation, now incorporating the Parks/Salyer deposit, based on available conventional technologies to generate approximately 2.31 billion pounds of payable copper over 21 years.
  • Additionally, Arizona Sonoran has entered into an equity and financing joint venture with Nuton LLC, a wholly owned subsidiary of Rio Tinto Group targeting the deployment of the Nuton heap leach treatment technology. A new PFS will be completed by the end of 2024, incorporating the Nuton technology.

Frederick Bell, chief executive officer of Elemental Altus, commented:

"The increase in reserves and resources at Caserones comes alongside the largest exploration program conducted since 2013, and we see the potential for the mine life to continue to be extended. At Diba, the value of our royalty has significantly improved with a maiden reserve and an increase of 70 per cent in the measured and indicated resource before further exploration. Sadiola is a Tier 1 10-million-ounce resource and our royalty covers ground adjacent and along strike from some of the key resources. Lastly, at Arizona Sonoran, Rio Tinto's strategic investment is a major vote of confidence for the project and our copper royalty. Incorporating Nuton, we see the potential for nearly doubling forecast copper production alongside a clear pathway to add to the already substantial 21-year mine life."

Portfolio update

Caserones -- reserve and resource update

On Feb. 8, 2024, Lundin Mining announced an update to the mineral reserve and mineral resource estimates at Caserones. The increases to mineral reserves and resources, plus 6 per cent and plus 35 per cent, respectively, before 2023 production depletion, were due to block model updates, higher metal price forecasts and changes to mineral resource classification. The overall increase in mineral resources included a 30-per-cent increase in inferred resources that highlights the exploration upside.

The news release noted the renewed exploration drilling program at Caserones, the largest since commercial production began in 2013, which is targeting increased mineral resources and mine life extension.

An attached table summarizes the updated mineral reserve at Caserones, effective as of Dec. 31, 2023 (1).

Another table summarizes the updated mineral resource at Caserones, effective as of Dec. 31, 2023 (1).

Caserones -- operator production guidance

On Jan. 14, 2024, Lundin Mining announced its 2024 production guidance for Caserones as follows.

2024:  120,000 to 130,000 tonnes of copper and 2,500 to 3,000 tonnes of molybdenum

2025:  125,000 to 135,000 tonnes of copper and 1,500 to 2,000 tonnes of molybdenum

2026:  125,000 to 135,000 tonnes of copper and 2,500 to 3,000 tonnes of molybdenum

Ore is expected to be sourced from pit phases 5 and 6, with ore production planned to increase by two million to three million tonnes per year to 34 million to 36 million tonnes per year to offset the expected lower copper grades. Molybdenum production has accounted for approximately 5 to 15 per cent of revenue in recent years.

Lundin Mining's group exploration expenditures, primarily for in-mine and near-mine targets, are planned to be $48-million (U.S.) in 2024. Caserones is allocated the largest portion of the exploration budget, with 12,900 metres (m) of drilling planned during the year. The focus of exploration work will be in-pit drilling targeting the Caserones higher-grade breccia zones at depth and, separately, testing the sulphide potential beneath the known Angelica oxide deposit.

Elemental Altus has a 0.473-per-cent net smelter return (NSR) royalty on Caserones.

Diba -- first reserves and production start date

On Feb. 21, 2024, Allied Gold released its 2023 operating results and provided guidance for 2024 production. Included in the announcement was confirmation that production from Sadiola's Diba satellite deposit was expected to commence during H1 2024. The licences hosting Diba were sold by Elemental Altus to Allied Gold for cash, a royalty and staged payments as announced on July 20, 2023, and represented the conclusion of a long-term royalty generation project, amounting to: 3.0 per cent on the first 226,000 ounces of gold produced from the Diba tenement; and 2.0 per cent on all future production in excess of defined 226,000 ounces from the project.

Additional consideration of up to $6-million (U.S.) in cash, comprising: $1-million (U.S.) on closing (received in November, 2023); $1-million (U.S.) 90 days after commercial production, expected during 2024; $2-million (U.S.), $1-million (U.S.) and $1-million (U.S.), respectively, within 90 days of production of 100,000 ounces, 150,000 ounces and then 200,000 ounces of gold from the Diba tenement -- all of which should be received with the delivery of the recently announced mineral reserve estimate.

Allied Gold, since the acquisition in July last year, has already increased the Diba measured and indicated resource and defined an initial reserve on the oxide portion of the deposit, as follows: proven and probable reserve of 6.1 million tonnes at 1.43 g/t for 280,000 ounces of gold; measured and indicated resource of 8.8 million tonnes at 1.33 g/t for 377,000 ounces of gold.

These results can be compared with the August, 2022, indicated resource (2) on the oxide and transition portion of the deposit of 4.75 million tonnes at 1.47 g/t for 224,000 ounces of gold, so a like-for-like comparison on Diba's oxide and transition measured and indicated resource shows an increase of 153,000 ounces of gold, an increase of around 70 per cent. The mineral resource in the fresh portion of the deposit has not been updated in Allied Gold's announcement, but as of August, 2022, hosted an indicated resource (2) of 3.1 million tonnes at 0.88 g/t for 88,000 ounces of gold and an inferred resource (2) of 8.8 million tonnes at 0.90 g/t for 255,000 ounces of gold.

A significant exploration program is planned for the Sadiola district during 2024, with a total estimated expenditure of $8-million (U.S.) for 12,000 m of drilling. Exploration is reported to prioritize the expansion of Sadiola's near-mine oxide ore inventory for use as near-term ore feed. The Diba deposit, following the recent mineral resource increase, is expected to continue to form a large part of the oxide exploration strategy. The nearby Lakanfla tenement that was part of the 2023 sale, where shallow drilling has defined an inferred resource in a mineralizing system similar to Sadiola's, also has the potential for further delineation of oxide mineralization in the near term.

Bonikro -- operator production guidance

During the same Feb. 21, 2024, announcement, Allied Gold provided production guidance at Bonikro in Ivory Coast of 95,000 to 105,000 ounces of gold in 2024 and greater than 110,000 ounces of gold per year long-term from existing ore sources.

The Bonikro mine plan in recent months has been transitioning to production from a mine area known as Pushback 5, which is covered by Elemental Altus's royalty and is expected to provide the majority of production over coming years.

Production covered by the royalty in 2023 totalled 44,570 ounces of gold, with consistent, material production only starting in Q4 2023 and progressing to an average annualized production rate in the order of 100,000 ounces of gold by the year-end.

Elemental Altus acquired a sliding-scale NSR royalty on 560,000 ounces of gold production from a defined area known as Pushback 5, in December, 2021. The royalty has a rate of 2.25 per cent when the average gold price during the period is above $1,450 (U.S.) per ounce.

Cactus -- Nuton joint venture

On Dec. 14, 2023, Arizona Sonoran announced that it has entered into an option to joint venture agreement with Nuton, a wholly owned subsidiary of Rio Tinto, to establish a strategic alliance for the deployment of the Nuton heap leach treatment technologies at the Cactus mine and the Parks/Salyer project in Arizona in the United States. The agreement grants Nuton the right and option to acquire between a 35-per-cent and a 40-per-cent interest in the Cactus project and follows Arizona Sonoran's reporting of encouraging metallurgical results from the Nuton phase 1 column leach program on Dec. 13, 2023.

The parties to the Cactus-Nuton JV plan to commence work under the direction of a newly formed steering committee, comprising two members selected by each of Arizona Sonoran and Nuton, toward a prefeasibility study (PFS), which integrates Nuton technology into the processing flowsheet. The Nuton-integrated PFS is targeted for delivery by the end of 2024 and will be developed in parallel with the previously announced timeline of releasing a stand-alone PFS for the Cactus project in Q1 2024 and a definitive feasibility study before the end of 2024.

The option agreement provides initial financing totalling up to $33-million (U.S.) to advance the Cactus project, of which $15-million (U.S.) has been received, including: $10-million (U.S.) option payment on closing; $12-million (U.S.) to finance work programs related to Nuton integration; and up to $11-million (U.S.) for land acquisition costs.

Should Nuton exercise its option to joint venture, it may acquire a 35-per-cent to 40-per-cent interest in the Cactus project, with the percentage interest acquired dependent on certain trigger events. The consideration paid by Nuton will be dictated by the product of: (a) the net asset value (NAV) of the PFS; (b) the percentage acquired; (c) a multiple of 0.65. See the original Arizona Sonoran announcement from Dec. 14, 2023, for further details.

Further to the Nuton announcement, on Jan. 10, 2024, Arizona Sonoran announced drill results defining primary mineralization of 358 m, with 153 m within and 205 m thickness below the currently defined Cactus West pit shell, and other drill holes with hundreds of metres of anomalous primary material in the same sequence, including zones in excess of 1 per cent copper. Primary mineralization was also intersected at Cactus East. More drilling is planned at Cactus West.

Preliminary results from the Nuton metallurgical testing indicate the possibility of 80-per-cent to 85-per-cent recovery from primary mineralization and Arizona Sonoran sees the technology as a potential solution to realize the value of the currently stranded primary sulphides that lie directly below the current oxide/enriched resource. The recent intersections were extensions of drill holes that was part of the continuing indicated to measured resource upgrade and geotechnical drill program and clearly demonstrate the opportunity for further significant resource expansion available with the integration of the Nuton technologies.

Cactus -- pre-Nuton, stand-alone PFS and first mineral reserve estimate

On Feb. 21, 2024, Arizona Sonoran announced the results of the stand-alone PFS for the project absent the addition of Nuton technologies, to produce LME Grade A copper cathode via open-pit and underground mining, and heap-leach-sourced solvent extraction/electrowinning treatment plant. Average annual production contemplated is approximately 55,000 short tons of copper per year for 21 years, for a total of 1.15 billion short tons produced, with an all-in sustaining cost of $2.34 (U.S.) per pound (lb).

The envisaged project incorporates the Parks/Salyer deposit that was first integrated into the project mineral resource estimate in October, 2023, where the measured and indicated resource was 445.7 million short tons at 0.58 per cent copper for 5.2 billion pounds of contained copper.

The PFS generates the project's first mineral reserve estimate, which amounts to a proven and probable reserve of 276.3 million short tons at 0.549 per cent total copper, including 0.484 per cent soluble copper for contained metal of 3.0 billion pounds of copper.

Exploration and feasibility work continue, particularly in relation to the impacts of the Nuton technologies, and the opportunity to materially increase the ultimate scale of recoverable metal, with both a preliminary economic assessment incorporating the recently acquired MainSpring deposit and initial Nuton results, and a fully integrated PFS using both the 2024 exploration and more advanced Nuton results by the end of 2024, and a DFS expected in H1 2025.

Elemental Altus acquired an aggregate 0.68-per-cent NSR royalty, which covers the majority of the Cactus project, in September, 2023.

Options and RSU grant

The company has granted 1.3 million RSUs and 2.98 million stock options to directors, officers, employees and consultants of the company. The RSUs vest in equal instalments over 12, 24 and 36 months. Each vested RSU will entitle the holder to receive one common share of the company or the equivalent cash value thereof at the deemed price of $1.05 (Canadian). The RSUs will fully vest on Feb. 28, 2027. The stock options are exercisable for a period of five years from the date of the grant at an exercise price of $1.15 (Canadian) per common share. The stock options vest in four equal instalments on the date of grant, and on the six-month, 12-month and 18-month anniversaries thereof. The stock options will expire on Feb. 28, 2029.

The stock options have been granted to directors, officers, employees and consultants of the company under the terms of the company's stock option and compensation share plan, and are subject to regulatory approval.

About Elemental Altus Royalties Corp.

Elemental Altus is a revenue generating precious metals 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.

Notes

(1) Caserones mineral resource estimates are reported within conceptual pit shell using a cut-off grade of 0.13 per cent copper. Mineral reserves for the Caserones open pit are estimated using open-pit discard NSR cut-off values of $11.70 per tonne (t) for ore processed at concentrating and $3.65 per t for ore delivered to the heap leach and SX/EW processing.

(2) Altus Strategies PLC news release, Aug. 2, 2022, "Significant Growth in Gold Resource at Diba & Lakanfla Project, Western Mali."

Qualified person

Richard Evans, FAusIMM, senior vice-president, technical, Elemental Altus, is a qualified person under National Instrument 43-101, Standards of Disclosure for Mineral Projects, and has reviewed and approved the scientific and technical disclosure contained in this news release.

We seek Safe Harbor.