Interview with Frederick Bell, CEO, Elemental Altus Royalties Corp

Our previous interview: https://www.cruxinvestor.com/posts/elemental-altus-royalties-tsxvele-consolidating-cash-flowing-gold-royalty-portfolio-6093

Recording date: 9th of April, 2025

Elemental Altus Royalties Corp is positioning itself for a transformative 2025, projecting to nearly double its revenue amid favorable gold prices and strategic acquisitions. The company anticipates revenue to reach approximately $45 million in 2025, up from $21.6 million in 2024, representing a 100% increase.

CEO Frederick Bell recently outlined the company's evolution from a private million-dollar entity to a fast-growing gold and copper royalty company with a market capitalization over $200 million. Two major factors driving this growth are the consolidation of the AlphaStream portfolio, expected to contribute an additional $7-8 million in revenue, and the startup of the Karlawinda royalty with Allied Gold.

"This year Q1 is going to be a record, Q2 is going to be a record by a large margin," Bell stated, noting that unlike previous years, much of the revenue growth is weighted toward the first half of 2025.

The company has strengthened its board with three significant additions: Prashant Francis from AlphaStream (a 14% shareholder), Matthieu Bos of Falcon Energy Materials, and Sandeep Singh, former CEO of Osisko Gold Royalties. These appointments enhance the company's North American market presence and deepen its royalty sector expertise.

Financially, Elemental Altus has paid down all $30 million of its previously drawn debt, leaving it with an undrawn credit facility and the strongest balance sheet in its history. With a fixed cost structure of approximately $10 million (including $6 million in G&A and $4-4.5 million in taxes), the growing revenue directly improves margins.

Bell believes the company presents compelling value, trading at approximately 6.5 times projected 2025 revenue compared to junior peers at 10x, mid-tiers at 15x, and majors at 20x. The company offers diversified exposure to 10 producing assets and 60-70 exploration/development royalties covering 13,500+ square kilometers.

The royalty model provides unique advantages in the current inflationary environment, as royalties come off top-line revenue. "For the royalty company, you have more downside protection... you don't have the inflation side of it and you have all the exposure to the upside," Bell explained.

With $15-20 million in cash expected to build on the balance sheet, management is evaluating various capital allocation strategies, including potential acquisitions (ranging from $1 million to $50-60 million), share buybacks through its newly established normal course issuer bid, and potentially introducing a dividend.

Learn more: https://www.cruxinvestor.com/companies/elemental-altus-royalties

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