Projects & Royalties

SKO

Project: SKO
Commodity: Gold
Royalty: A$10/oz
Subsidiary: Altus Royalties Holdings Ltd
Location: Australia
Deposit Style: Paleoplacer and orogenic
Key Attributes: Large resource base with exploration upside
Asset Stage: Paying royalty, estimated cash flow of US$ 0.2m (post-tax) per year to Altus
Results: Resource of 6,056 kt @ 5.6 g/t for 1.0Moz (31 March 2021), Reserve of 1,729 kt @ 5.1 g/t for 286koz (31 March 2021)
Next Phase of Work: Mine life - 17 years from 2022 with further expansion potential
Deal Partner: Northern Star Resources Ltd
Deal Terms: Production Royalty of A$10/oz Discovery Royalty of A$1.0m for each additional orebody discovery with reserves > 250koz

Project Overview

The South Kalgoorlie Operations (SKO) are located in Kalgoorlie, Western Australia, and comprise a producing underground gold mine (known as HBJ Underground) as well as the JubileeCIL plant (1.2Mpta) wholly owned and operated by Northern Star Resources Ltd since 2018. Together, these are integral to Northern Star’s regional Kalgoorlie Operations and expected to continue to contribute approximately 50% of the ore to the Jubilee processing plant.

Gold mineralisation is predominantly associated with greenstones overlain by a volcano-sedimentary sequence in orogenic and paleoplacer style deposits controlled by NNW-trending brittle-ductile shear zones.

At 31 March 2021, Northern Star reported Total Resources of 6,056 kt grading 5.6 g/t for contained gold of 1.0Moz. Reserves were also reported at 1,729 kt grading 5.1 g/t for contained gold of 286koz. HBJ Underground has been mined at a depth of up to 580m from surface by a top down long hole open stoping (LHOS) method. The Jubilee processing plant circuit is a conventional CIL plant with a hard rock processing capacity and processes up to 1.2 Mtpa of free milling gold ore at an overall gold recovery of approximately 90%.

The ore body remains open down plunge with limited effective deep drilling undertaken. With a track record of consistent resource conversion, Northern Star is assessing potential extensions, including to the north (Mutooroo) and the south (South Jubilee) of current workings.

Royalty Overview

Altus owns 80.1% of an uncapped Production Royalty equal to A$10 per ounce produced from a package of five tenements at SKO (E26/122, M15/717, M26/118, M26/143, M26/224). Since 2011, the mine has generated Production Royalties of A$4.0m to 31 December 2020. The Production Royalty is projected to generate US$220,000 in average annual after-tax cash-flows to Altus assuming annual attributable production of 40,000 oz and an expected 18 year mine life. The Company also owns 80.1% of a Discovery Royalty with A$1 million payable for each new ore body on the royalty tenement package with a reserve greater than 250,000 oz of gold.

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