Elemental Altus to sell stake in Diba project in Mali
Elemental Altus Royalties has agreed to sell its 100% stake in the Korali-Sud Small Scale mining licence (Korali Sud) and Lakanfla exploration licence, collectively known as the Diba project, located in western Mali to Allied Gold.
The sale will be conducted through the acquisition of Elemental Altus Royalties’ subsidiary, Legend Mali (BVI) III, which indirectly owns 100% of the Diba project. Under the terms of the sale and purchase agreement (SPA), Allied Gold will pay a cash amount of up to $6 million to Elemental Altus Royalties. In addition to the cash payment, Allied Gold will also grant a net smelter return (NSR) royalty of up to 3% on the gold produced from the Diba project.
Diba project
The Diba project is situated 15 kilometers south of Allied Gold’s Sadiola Gold Mine processing plant and is adjacent to the Sadiola large-scale mining licence. By incorporating the shovel-ready resource at the Korali-Sud Small Scale Mining Licence into the Sadiola mine plan in 2024 and 2025, Elemental Altus Royalties expects to fast-track royalty revenue and cash payments.
Allied Gold plans to initiate an infill drilling campaign at the Diba project, aiming to refine and expand its potential contribution to Sadiola’s near-term production profile. Elemental Altus Royalties selected Allied Gold as the successful bidder after a competitive process, primarily due to the operational synergies with Allied Gold’s adjacent Sadiola Gold mine complex.
The Sadiola Gold mine complex is recognized as one of the largest and longest-operating multi-open-pit gold mines in Mali. According to Elemental Altus CEO Frederick Bell, the sale is expected to enable the rapid production of oxide material from the Diba project and its incorporation into the Sadiola mine, significantly accelerating the time to receive royalty cash flows. This approach also helps mitigate risks associated with the construction of a completely new mine.
The NSR royalty invlolves a3.0% NSR on the first 226,000 ounces of gold fast-tracked into production from the Korali-Sud Small Scale Mining Licence, which is estimated to amount to over 6,000 attributable ounces, and a 2.0% NSR on all additional ounces of gold produced from the Diba project after the initial 226,000 ounces. In addition to the NSR royalty, there will also be upfront cash and milestone payments totaling up to $6 million.
