Quarterly report Q4 2018

Altus Strategies Plc / Index (EPIC): AIM (ALS) & TSXV (ALTS) / Sector: Mining

NOT FOR DISTRIBTUION TO US NEWSWIRE SERVICES NOR FOR DISSEMINATION IN THE UNITED STATES OF AMERICA

30 April 2019

Altus Strategies Plc

("Altus" or the "Company")

Quarterly Report

Altus Strategies Plc (AIM: ALS & TSX-V: ALTS), the Africa focused royalty and project generator, announces that it has published its Management Discussion & Analysis for the quarter and year ended 31 December 2018. This document has been posted on the Company's website www.altus-strategies.com and is also available on SEDAR at www.sedar.com.

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

For further information you are invited to visit the Company's website www.altus-strategies.com or contact:

About Altus Strategies Plc

Altus is a London (AIM: ALS) and Toronto (TSX-V: ALTS) listed royalty and project generator in the mining sector with a focus on Africa. Our team creates value by making mineral discoveries across multiple licences. We enter joint ventures with respected groups and our partners earn interest in these discoveries by advancing them toward production. Project milestone payments we receive are reinvested to extend our portfolio, accelerating our growth. The portfolio model reduces risk as our interests are diversified by commodity and by country. The royalties generated from our portfolio of projects are designed to yield sustainable long term income. We engage constructively with all our stakeholders, working diligently to minimise our environmental impact and to promote positive economic and social outcomes in the communities where we operate.

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this news release contain forward-looking information. These statements address future events and conditions and, as such, involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements. Such factors include without limitation the completion of planned expenditures, the ability to complete exploration programs on schedule and the success of exploration programs. Readers are cautioned not to place undue reliance on the forward-looking information, which speak only as of the date of this news release.

Neither the TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this release.

ALTUS STRATEGIES PLC

MANAGEMENT'S DICSUSSION AND ANALYSIS

FOR THE YEAR ENDED 31 DECEMBER 2018

GENERAL

This discussion and analysis ("MD&A") of financial position and results of operations is prepared as at 30 April 2019 and should be read in conjunction with Altus Strategies plc's (the "Company", or "Altus" and together with its subsidiaries "the Group") annual report and consolidated financial statements for the year ended 31 December 2018.

The Group's financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and IFRS interpretations committee (IFRS IC) interpretations as adopted for use in the European Union and with IFRS and their interpretations issued by the IASB. The consolidated financial statements have also been prepared in accordance with those parts of the Companies Act 2006 applicable to companies reporting under IFRS, (except as otherwise stated).

The financial statements have been prepared on the historical cost basis, as modified by the financial assets at fair value through profit or loss. The financial statements are prepared in British Pounds Sterling (£), which is the functional currency of the Company. Monetary amounts in these financial statements are rounded to the nearest whole pound.

Additional information on the Company's activities can be found on https://beta.companieshouse.gov.uk/, www.sedar.com and on the Company's website at www.altus-strategies.com.

DESCRIPTION OF BUSINESS

Altus is a public limited company incorporated and domiciled in England and Wales. The Company's shares are listed on the AIM Market of the London Stock Exchange ("AIM") under the symbol "ALS" as of 10 August 2017 and on the TSX Venture Exchange ("TSX-V") under the symbol "ALTS" as of 06 June 2018.

The principal activity of the Group and Company is that of a project and royalty generator in the field of mineral exploration with a focus on Africa. Our business model is to make and monetise mineral discoveries. We proactively seek joint venture partners to finance the exploration and development of the projects we have generated, in return for a share in their ownership and the payment of future royalties to Altus. Our goal is to create shareholder value by participating in the potentially substantial and long term returns on capital that can be made by making economic mineral discoveries. Risk diversification is at the heart of our philosophy, and we enact this by exploring for a variety of minerals at multiple locations across several jurisdictions. At the end of 2018 the Group had a diversified portfolio of seventeen projects, exploring for six different commodities across six countries. This diversification means that the portfolio is constantly evolving: new licences are added, licences that are not considered to be a good prospect are relinquished, those for which onsite surveying works and office-based data and sample analysis indicate a potentially economic discovery can be made are actively marketed, licences that are under JV partnerships will be drilled, and the successful of these will result in mines being built and royalties accruing to Altus on the mineral assets produced.

FORWARD LOOKING INFORMATION

This MD&A may contain "forward-looking statements" that reflect the Company's current expectations and projections about its future results. When used in this MD&A, words such as "estimate", "intend", "expect", "anticipate" and similar expressions are intended to identify forward-looking statements, which, by their very nature, are not guarantees of the Company's future operational or financial performance, and are subject to risks and uncertainties and other factors that could cause Altus's actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. These risks, uncertainties and factors may include, but are not limited to: unavailability of financing, failure to identify commercially viable mineral reserves, fluctuations in the market valuation for commodities, difficulties in obtaining required approvals for the development of a mineral project and other factors.

The operating plan is also dependent on being able to raise new equity funds as required to ensure there are sufficient capital resources to acquire and explore new properties. Other factors which affect Altus' operating plan are gaining access to exploration properties by concluding agreements with local communities, and commodity prices. If any of these factors are affected negatively, such as joint venture partners being unable to raise sufficient capital to complete option agreements or if the Company is unable to raise sufficient capital of its own, there will be a significant impact on the Company's operating plan and on any forward-looking statements contained herein.

Any references made in this report to historical information, including historical geologic and technical information cannot be verified. A qualified person ("Qualified Person") under the AIM rules and National Instrument 43-101 Standards of Disclosure of Mineral Projects of the Canadian Securities Administrators ("NI 43-101") has not verified the sampling, analytical, and test data underlying any such historical information. The Company has obtained historical information from sources that it believes to be reliable and assumes it is accurate and complete in all material aspects. While the Company has carefully reviewed the available historical information, it cannot guarantee its accuracy and completeness. The forward looking information and statements included in this announcement are expressly qualified by this cautionary statement and are based on the beliefs, estimates and opinions of the Company on the date of this announcement. Except as required by securities laws the Company does not undertake any obligation to publicly update or revise any forward looking statements in the event that management's beliefs, estimates or opinions, or other factors, should change.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this MD&A or as of the date otherwise specifically indicated herein. Due to risks and uncertainties, including the risks and uncertainties identified above and elsewhere in this MD&A, actual events may differ materially from current expectations. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise except as required by securities law.

HIGHLIGHTS

Highlights for the three months ended 31 December 2018 and to the date of this report are as follows:

Corporate highlights:

· Letter of Intent signed with ASX-listed Canyon Resources to terminate the Company's bauxite JV in Cameroon in return for 25 million Canyon shares and to vend the JV licences into Canyon for an additional 5 million Canyon shares and a US$1.50/t royalty on the licences

· Purchase of Ordinary Shares ("Shares") undertaken by certain directors of the Company totalling 1,520,431 Shares representing 0.85% of the issued share capital

· Total director shareholding in the Company of 63,017,998 Shares, representing 35.45% of the issued share capital

Operational highlights:

· Drill targets defined at Lakanfla gold project, western Mali

· High Grade Silver discovery at Daro project, northern Ethiopia

· Discovery of Zinc, Cobalt & Copper at Takzim project, central Morocco

Financial highlights:

· Balance of cash and marketable securities of £1.6m / C$2.8m (cash balance of £0.7m / C$1.3m and listed equity holdings of £0.9m / C$1.5m as at 31 December 2018)

· Cash outflow for operating activities of £0.4m / C$0.7m for 3 months and £1.8m / C$3.1m for 12 months ending 31 December 2018

Post period:

· Termination of Letter of Intent with Raptor Resources for Morocco subsidiary

· Drill Targets defined at Diba gold project, western Mali

· JV Term Sheet signed with ASX-listed Indiana Resource on Lakanfla and Tabakorole gold projects, western and southern Mali

· Extension to due diligence period for Indiana Resources

· Drill targets defined at Tabakorole gold project, southern Mali

· Significant new prospect defined at Diba gold project, Western Mali

· Royalty and JV Terms Sheet signed with Corben Resources Ltd on Zolowo and Laboum gold projects in Liberia and Cameroon

OPERATIONS REPORT

Altus is a project and royalty generator which is focused on Africa. The Company's business model is to make mineral discoveries, prior to undertaking joint ventures with third parties who can earn up to a 100% equity interest in our projects by financing the next stages of exploration, making milestone payments to the Company and entering a royalty agreement with the Company on future production.

Due to its large size, many parts of Africa remain under-explored or not explored at all. Altus believes that significant economic deposits can still to be discovered at or close to surface. Importantly this means that in Africa the speed of discovery can potentially be faster and the cost of discovery can potentially be lower for shareholders, when compared to more mature mining jurisdictions.

At the time of writing, Altus has a diversified portfolio of seventeen precious metal (gold and silver) and base metal (copper, zinc, bauxite and iron ore) exploration projects across six African countries (Morocco, Ethiopia, Cameroon, Liberia, Côte d'Ivoire and Mali). The Company has two active joint ventures, with both its partners being listed on the Australian Stock Exchange ("ASX"). The Company's current partners are Resolute Mining Ltd (ASX: RSG) on the Company's Pitiangoma Est gold project in southern Mali, and Canyon Resources Ltd (ASX: CAY) on the Company's Birsok & Mandoum bauxite project in central Cameroon. The Company has agreed to terminate the latter JV for equity in Canyon and vend the licences to Canyon for further equity in Canyon and a $1.50/t royalty (subject to the grant of a mining licence). At the time of writing the Company was ensuring various conditions precedent as detailed in the final agreements had been met. After the end of the year, Altus announced a Terms Sheet with ASX-listed Indiana Resources Ltd in respect of two of our gold projects in Mali, and a Terms Sheet with unlisted Australian company Corben Resources Ltd in respect of our gold projects in Liberia and Cameroon.

During the quarter ending 31 December 2018, the Company's technical team has undertaken a series of exploration programmes across its projects, as well as examining new potential opportunities to be fed into the project pipeline.

The following is a review of the Company's activities by jurisdiction and project during the period.

Mali Operations

Altus holds six projects in the Republic of Mali. The projects are held through the Company's 100% owned subsidiary, LGN Holdings (BVI) Inc., which became part of the Group in January 2018 through a plan of arrangement with Legend Gold Corp. ("Legend"), which was previously listed on the TSX-V.

Korali Sud (Diba) Gold Project (83.1 km2), Western Mali

Korali Sud ("Diba") is located in the Kayes region of western Mali, approximately 450km northwest of the capital city of Bamako. The project is 13km southwest of the Sadiola gold mine, which is operated by AngloGold Ashanti (JSE: ANG, NYSE: AU, ASX: AGG), IAMGOLD (TSX: IMG, NYSE: IAG) and the Malian government. Both Sadiola and Korali Sud are situated on the Senegal-Malian shear corridor within the world renowned 'Kenieba window'.

Korali Sud hosts the Diba historical resource (see Table 1 below), as prepared for Legend by AMEC Americas Limited ("Technical Report and Mineral Resource Estimate Diba Badiazila Gold Property Mali, West Africa", 30 June 2013) and filed on SEDAR by Legend on 20 September 2013. A Qualified Person has not done sufficient work to classify this historical estimate as current mineral resources and Altus is not, therefore, treating this historical estimate as a current mineral resource. However, it remains relevant to the Project and Altus believes it is also reliable. To verify this historical estimate so that the resource can be considered current, Altus would be required to contract a qualified and independent consultant to review historical drilling data and prepare a resource estimate in accordance with NI 43-101.

The resource comprises stacked lenses which dip approximately 35-40 degrees ESE within the oxide zone.

Notes: Applying a 0.5g/t cut-off grade and a US$1,200/oz gold price as reported in 2013 NI 43-101 technical report.

Historical drill results from the Diba prospect (unverified by the Group) include 12m at 20.66 g/t Au and 32m at 2.06 g/t Au. Diba has a potentially low mining strip ratio with relatively limited overburden and a high proportion of the potential ore is in the oxide zone. Deeper drilling at Diba targeting the sulphide zone has intersected 1.32 g/t Au over 45m (from 93m). The sulphide zone remains open at depth.

Oxide gold mineralisation at Diba is mainly found in saprolite which is within 50m of the surface, across a compact 1,200m² area drilled to date. The deposit is controlled by a number of structures with gold occurring as fine grained disseminations and localised high grade calcite-quartz veinlets.

During the quarter the team undertook surface geochemical sampling of previously untested areas. Altus has defined multiple targets for follow up exploration and drilling which the Company considers have the potential to increase the historical resource.

Lakanfla Gold Project (24 km2), Western Mali

Lakanfla is located in the Kayes region of western Mali, approximately 450km northwest of the capital city of Bamako. The project is 5km east of Korali Sud and 6.5km from (and considered to be geologically analogous to) the karst-type FE3 and FE4 open pits that form part of the Sadiola gold mine. It is also considered to be geologically analogous to the Yatela karst-type gold deposit, which was mined between 2001 and 2015, located 35km to the northwest.

The project hosts a significant number of active and historical artisanal gold workings which are coincident with major geochemical and gravity anomalies surrounding a granodiorite intrusion. Historical drilling (unverified by the Group) has returned encouraging intersections including 9.78 g/t Au over 12m and 5.20 g/t Au over 16m. Historical drilling targeted breccia mineralisation of the granodiorite, and intersected low grade gold mineralisation in limestones, voids and lose sands at depth, features which are indicative of a karst. A low gravity geophysical anomaly and corresponding surface slumps features, are also considered to be significant indicators. The karst targets remain to be drill tested.

During the quarter, rock chip sampling was undertaken across the licence area to test previously unsampled areas. The next phase of work at Lakanfla is expected to include drill testing of the karst model.

Subsequent to the reporting period, on 7th February 2019 the Company signed a joint venture term sheet with ASX-listed Indiana Resources Ltd ("Indiana", ASX: IDA), whereby Indiana may earn up to 85% of the Company's Lakanfla and Tabakorole gold projects. The due diligence process is underway at the time of writing. Details of the agreement are available at the Group's website (www.altus-strategies.com/news, entry dated 7th February, 2019).

Djelimangara Gold Project (55 km2), Western Mali

Djelimangara is located in the Kayes region of western Mali, approximately 450km northwest of the capital city of Bamako. The project is 3km southeast from Korali Sud, and comprises four priority prospects: Sourounkoto, Kamana, Woyanda and Manankoto. These are characterised by gold-in-soil anomalies of up to 2.5km in length, coincident with hard rock gold workings in fine metasediments. Historical drilling (unverified by the Group) has reportedly returned encouraging intersections including 1.34 g/t Au over 30m.

During the quarter, rock chip sampling was undertaken across the licence area to test previously unsampled areas. The next phase of work is expected to include infill termite mound sampling, channel sampling of artisanal workings, trenching and infill auger sampling, to generate priority drill targets. Altus is seeking a JV partner to undertake auger drilling over priority targets to be followed up with trench and drill targets.

Sebessounkoto Sud Gold Project (28 km2), Western Mali

Sebessounkoto is located in the Kayes region of western Mali, approximately 450km northwest of the capital city of Bamako. The project is 15km southeast from Korali Sud. Historical trenching (unverified by the Group) undertaken by Barrick (formerly Randgold Resources) has reportedly returned up to 0.68 g/t Au over 61m. During 2018 the Group defined the Soa gold prospect covering a 2.7km long gold-in-soil anomaly, identified from mapping artisanal workings, and sampling spoil and termite mounds. Spoil samples returned up to 5.18 g/t Au, 3.98 g/t Au and 2.4 g/t Au. During the quarter, rock chip sampling was undertaken across the licence area to test previously unsampled areas.

Artisanal mining has focused on saprolite along a brittle-ductile shear zone typically associated with a stockworks of 'smoky quartz' veins. A review of the historical VTEM data has identified a 6.3km long anomaly parallel to the Soa prospect. Altus is seeking a JV partner to undertake auger drilling over priority targets to refine trench and drill targets.

Tabakorole Gold Project (100 km2), Southern Mali

Tabakorole is located 280km south of the capital city of Bamako and sits on the Massagui Belt, which hosts the Morila gold mine operated by Barrick. Exploration to date has identified a 2.7km long shear zone which is up to 200m wide and hosts a historical mineral resource, see table 2 below. The resource was prepared in accordance with NI 43-101 by H. Andrew Daniels, Consulting Geologist, P.Geo in a report entitled "Technical Report on the Mineral Resource Update, June 2007 FT Project Mali, West Africa", dated July 27, 2007 and filed on SEDAR on July 27, 2007 by North Atlantic Resources Ltd. A Qualified Person has not done sufficient work to classify this historical estimate as current mineral resources and Altus is not, therefore, treating this historical estimate as a current mineral resource. However, it remains relevant to the Project and Altus believes it is also reliable. To verify this historical estimate so that the resource can be considered current, Altus would be required to contract a qualified and independent consultant to review historical drilling data and prepare a resource estimate in accordance with NI 43-101.

Historical drilling (unverified by the Group) has returned encouraging intersections including 16m at 9.31 g/t Au, 14m at 9.84 g/t Au and 60m at 2.91 g/t Au. 

During the quarter the team continued exploration including excavating three test pits down to a depth of three metres to investigate an apparent geophysical anomaly. The results indicate the potential for a parallel mineralised trend. The next phase of work at Tabakorole is expected to include scoping studies and resource definition drilling, along with testing of further targets.

Tabakorole is included in the term sheet signed with Indiana (see Lakanfla above).

Pitiangoma Est Gold Project (106 km2), Southern Mali

Pitiangoma Est is located 300km southeast of the capital city of Bamako. The licence is subject to a joint venture with ASX-listed Resolute Mining Limited ("Resolute") and is located on the Syama shear zone, 15km from the Tabakoroni deposit and 40km from the Syama gold mine (both owned by Resolute). Resolute can earn up to a 70% interest in the project by funding US$3million in exploration and completing a feasibility study. Thereafter Altus may elect to co-fund its 30% interest on a pro rata basis, or exchange its interest for a 2% Net Smelter Return royalty.

Prior to the Resolute JV, exploration included airborne geophysics (VTEM), RC drilling (2,160m) and diamond drilling (6,450m). Resolute has reportedly completed 110 air core drill holes for a total of 4,869m and a gradient array IP survey focused on the Misseni Prospect, and this has reportedly been followed up by a 7-hole (3,167m) RC drilling programme in 2017. Altus has not verified the historical and recent drilling data at the project.

Cameroon Operations

Altus holds three projects in the Republic of Cameroon including the Laboum gold project, held through the Company's 99% owned subsidiary Auramin Ltd, the Birsok & Mandoum bauxite project and the Bikoula & Ndjele iron ore project that are held though the Company's 97.3 % owned subsidiary, Aluvance Ltd.

Laboum Gold Project (189 km2), Northern Cameroon

Laboum is located 600km northeast of the capital city of Yaoundé. The licence hosts a major Pan-African age, regional shear zone which is up to 5km wide and which comprises highly prospective Birimian metavolcanic and metasedimentary rocks. Results of a ground magnetic survey and regional soil sampling programme completed by the Company have defined numerous anomalies that are coincident with structural targets. Dilational and fold structures are considered to be excellent targets for potentially economic gold deposits. Rock chip sampling by the Company has produced grades of up to 24.50 g/t Au, 16.15 g/t Au from quartz veins and 6.86 g/t Au from sheared and silicified metasediments.

Exploration in 2018 defined the Rey prospect that hosts numerous artisanal alluvial gold workings over a 1km strike length of the shear zone with exposure of mylonite, diorite and felsic intrusives. This discovery extends the prospective zone over the Laboum shear zone to 18km. No further exploration work was undertaken on site during the quarter while the Company compiled data from the 2018 programmes.

After the end of the year, on 24 April 2019 Altus signed a Terms Sheet for a royalty and JV agreement with Corben Resources Ltd ("Corben"), an unlisted Australian company, whereby Altus will vend its Zolowo gold project in Liberia into Corben and Corben can also earn up to a 100% interest in the Laboum project. Details of the agreement are available on the Company's website (www.altus-strategies.com/news, entry dated April 24 2019).

Birsok (198 km2) & Mandoum (174 km2) Bauxite Project, Central Cameroon

The Birsok and Mandoum licences are located 370km northeast of the capital city of Yaoundé. From 2013 to October 2018 they were under a joint venture with ASX-listed Canyon Resources Ltd ("Canyon"). The project is contiguous with Canyon's Minim-Martap potentially world class bauxite project. In October 2018, Altus announced a Letter of Intent with Canyon to terminate the JV in return for 25 million Canyon shares and to vend the JV licences into Canyon for an additional 5 million Canyon shares and a US$1.5/t royalty on the licences (subject to Canyon receiving a mining licence). Details of the agreement with Canyon are available on the Group's website (www.altus-strategies.com/news, entries dated 11th October, 2018 and 11th February, 2019). Completion of the agreement is expected in Q2 2019. No material work was undertaken during the quarter by either JV partner.

Bikoula (200 km2) & Ndjele (200 km2) Iron Project, Southern Cameroon

The Bikoula and Ndjele licences are located 150km south of the capital city of Yaoundé. The licence is situated on the western geological strike of the Nkout iron ore deposit and 160km west of the Mbalam iron ore deposit. The licences are adjacent to the road linking to the deep water port at Kribi and are 30km north of the proposed trans-Cameroon east-west iron ore rail line.

The Group has defined a maiden JORC-compliant Inferred Mineral Resource of 46 Mt at 44% Fe. The resource statement is not in accordance with NI 43-101. The independent resource report was prepared by Coffey Mining South Africa (Pty) Ltd and entitled 'Mineral Resource Estimation and Classification of the Bikoula Iron Ore Project in Cameroon' and dated April 2014. The non-43-101 resource was calculated on less than 25% of the strike of a 17km long Libi Hills airborne geophysical target. To date 48 drill holes have been completed at Bikoula. During 2018, Altus pitted a large airborne magnetic anomaly at the Nkout North prospect. This work discovered further supergene haematite within reddish clayey soils. The Group consider this prospect and the undrilled remainder of the Libi Hills prospect represent excellent targets for the definition of further high grade iron ore resources. During the quarter the team reviewed the results of the previous quarter's pitting programme. Altus is seeking a partner to advance the project by further pitting, drilling and the preparation of an independent NI 43-101 compliant mineral resource estimate.

Morocco Operations

Altus holds four projects in the Kingdom of Morocco through its 100% owned subsidiary, Aterian Resources Ltd, targeting copper, lead, zinc, silver and gold.

A letter of intent, signed with Raptor Resources Ltd in September 2018 to earn up to a 100% interest on Moroccan projects, was subsequently terminated by mutual consent in February 2019. Altus continues to advance discussions with other third parties.

Agdz Copper-Silver Project (60 km2), Central Morocco

Agdz comprises four contiguous permits in the Anti-Atlas Mountains, 350km south of the capital city Rabat and 14km from the Bouskour copper mine which is operated by the Moroccan state mining group, Managem.

Altus has carried out geological mapping, surface outcrop sampling, reconnaissance trenching and ground magnetic surveys. This work has defined strongly mineralised and altered zones and a clear structural context. Three main prospects have been identified to date at Makarn, Amzwaro and Minière from which rock-chip samples have returned assay results up to 26.5% Cu and 448 g/t Ag and an initial rock-chip channel sample returned 1.25% Cu and 96 g/t Ag over 9.3 m, with grades up to 2.26% Cu and 223 g/t Ag. Rock-chip and spoil samples from the Minière prospect, which hosts multiple underground workings that exploit a series of sub-parallel alteration zones, have returned 13.0% Cu, 6.0% Cu and 5.0% Cu. Mapped alteration in the Makarn prospect is analogous to that of the Bouskour mine over a 0.5km strike length mapped to date. During the quarter a consultant with specialization in Anti-Atlas mineralisation visited the licence with the Company's team to assist in the Company's understanding of the observed mineralisation.

Takzim Copper-Zinc Project (72 km2), Central Morocco

Takzim comprises five permits located 35km northeast of the city of Marrakech and 7km east of the historical Bir-n-Hass copper mine. Altus conducted soil sampling over a 1.6km² area proximal to a historical excavation that returned 2.22% Zn from outcrop sampling. During the quarter the team assayed the collected samples. Results have identified a coherent 600m x 150m Zn-Pb anomaly along strike. Outcrop sampling of narrow haematite-rich nodules and lenses within these veins returned highly anomalous Co with grades up to 0.15% Co and 0.14% Co. Future work at Takzim is aimed at uncovering the extent of the anomaly and defining further targets.

Zaer Copper Project (96 km2), Central Morocco

Zaer comprises six permits located 80km south of the capital city of Rabat in the Hercynian Massif, which contains three large granitic plutons that have been intruded into a sequence of sediments. The region hosts active and historical mines for copper, tin, tungsten, lead and zinc. Zaer is strategically located covering a 20km strike length of metamorphic aureole along a granite-metasediment contact. No further work was conducted during the quarter. During the quarter the Company undertook data compilation and remote sensing studies on the Project.

Ammas Zinc-Lead Project (32 km2), Central Morocco

Ammas is comprised of two permits, located 30km south of the city of Marrakech. The project is 3km southeast and along strike of Managem's Hajjar Zn-Pb-Cu VMS mine. The Hajjar mine exploits a number of buried and folded massive sulphide lenses. No further work was conducted during the quarter. During the quarter the Company undertook data compilation and remote sensing studies on the Project.

Ethiopia Operations

Altus holds two projects in the Federal Democratic Republic of Ethiopia at Tigray-Afar and Daro. Both projects are held by the Company's 100% owned subsidiary, Altau Resources Ltd.

Daro Copper-Gold Project (411 km2), Northern Ethiopia

Daro is located 570km north of Ethiopia's capital city, Addis Ababa and 95km west of the Company's Tigray-Afar Cu-Ag project. Granted in October 2017, the project targets potential Volcanogenic Massive Sulphide ("VMS") copper and gold deposits. It is situated in the Neo-Proterozoic Nakfa Terrane, which hosts a number of significant VMS base metal and gold deposits and mines.

Prospecting and regional mapping has identified key geological markers for a VMS deposit type setting. These include the presence of bimodal volcanics, extensive chert horizons and associated metasediments, which conform to an ophiolite complex of ancient oceanic crust and seafloor sediments.

During 2018 Altus defined four priority prospects at Keren, Teklil, Wedihazo and Simret. The Keren prospect strikes for 2km with grab and outcrop samples returning up to 37 g/t Au and 10.35 g/t Au. At the 2.5km long Teklil prospect, located within an ophiolite complex, rock chip and grab samples have returned 24% Cu, 6.51 g/t Au and 203 g/t Ag. Rock chip and grab sample results at the 0.5km long Wedihazo prospect, have returned up to 22.3% Cu and 0.24 g/t Au. At the Simret prospect, grab samples have returned up to 944 g/t Ag, 3.55 g/t Au and 2.72% Pb and discovered Au-Ag-Cu-Pb-Zn bearing quartz veins and gossanous float. In the quarter, Altus' technical adviser visited the licence and provided additional insight into the geological setting of the licence with a view to the development of new targets.

Altus is actively seeking a JV partner for Daro to conduct trenching and a geophysical gravity survey with the aim of defining targets for a follow up maiden drill programme.

Tigray-Afar Copper-Silver Project (242 km2), Northern Ethiopia

Tigray-Afar is located 580km north of Ethiopia's capital city, Addis Ababa and 95km east of the Company's Daro Cu-Au project. An evaluation of previous exploration data, has identified a potential sediment hosted copper target within a 5km long VTEM conductor. The zone hosts gossans at surface, which are interpreted to overlay a potential copper sulphide source which has yet to be drill tested. No further work was undertaken during the quarter. The next steps for the project will be to conduct a 2,000m 5-hole programme to test the presence of sedimentary hosted copper mineralisation. Altus is actively seeking a JV partner for Tigray-Afar.

Liberia Operations

Altus holds one licence (namely Zolowo) in the Republic of Liberia through its 100% owned subsidiary, Auramin Ltd, targeting orogenic lode gold deposits within the Man Shield, which forms part of the West African Craton. During the period the Company relinquished its Bella Yella gold project as the scale and continuity of potential gold bearing structures was not considered sufficient to attract a JV partner.

Zolowo Gold Project (466 km2), Western Liberia

Zolowo is located 190km northeast of the capital city of Monrovia. The licence targets a significant 33km long Archaean-age greenstone belt on the West African Craton. Results from sampling of in situ quartz veins and spoil from artisanal workings, which were conducted during the quarter, returned encouraging grades up to 30.70 g/t Au, 9.10 g/t Au, 8.8 g/t Au, 4.3 g/t Au and 2.95 g/t Au. Other work in the quarter included a pilot scale soil sampling programme on the licence. The next phase of work will include systematic soil and trenching programmes.

Zolowo was included in the Terms Sheet signed with Corben Resources (see Operations in Cameroon, Laboum project).

Côte d'Ivoire Operations

Altus holds one granted licence (namely Prikro) and two licence applications in the Republic of Côte d'Ivoire. The licence and applications are held through the Company's 100% owned subsidiary, Aeos Gold Ltd.

Prikro Gold Project (369.5 km2), Southwestern Côte d'Ivoire

Prikro is located 240km southeast of the capital city of Abidjan. The project targets a favourable folded and sheared Birimian-aged greenstone sequence intruded by felsic plutons, and hosts historical Au, Cu, Zn and Mo mineral occurrences. No further work was undertaken during the quarter. The next phase of work will include prospecting, mapping and termite sampling.

Qualified Person

The technical disclosure in this MD&A has been read and approved by Steven Poulton, Chief Executive of Altus. He has not verified the historical data disclosed in this regulatory announcement but has no reason to question its accuracy. A graduate of the University of Southampton in Geology (Hons), Steven Poulton also holds a Master's degree from the Camborne School of Mines (Exeter University) in Mining Geology. He is a Fellow of the Institute of Materials, Minerals and Mining and has over 20 years of experience in mineral exploration and is a Qualified Person under the AIM rules and National Instrument 43-101 Standards of Disclosure of Mineral Projects of the Canadian Securities Administrators.

OUTLOOK

The Company's strategy for the next twelve months will be to:

· secure joint venture partnership and royalty transactions for its projects;

· advance its exploration projects to the stage where they are ready to be transacted on;

· generate new projects within its current countries of operation; and

· evaluate early to advance stage project and royalty acquisition opportunities, which may exist privately or within listed companies.

The Company looks forward to progressing and formally closing its agreements with Canyon, Indiana and Corben in Cameroon, Mali and Liberia. Separately the Company is actively seeking partnerships on its remaining projects and expects to enter further letters of intent with potential joint venture partners or groups seeking a corporate transaction on one or more of the Company's projects. The Company continues to monitor and consider opportunities to apply for or acquire new licences in and outside of its existing countries of operation.

In the meantime, the Company remains focused on six countries at present namely Mali, Ivory Coast, Liberia, Cameroon, Morocco and Ethiopia. The Company's current exploration programmes are expected to generate technical results that will be reported upon in due course.

RESULTS OF OPERATIONS

Three Months Ended 31 December 2018

For the three months to 31 December 2018 Altus recorded a net loss of £545,000 compared to a net profit of £18,000 in the previous three months. The results of the previous quarter included a £495,000 fair value gain on investment due to an increase in the value of Canyon shares (ASX:CAY); in Q4 of 2018 there was a £47,000 fair value loss on investment.

Exploration costs were higher in Q4 with the Company having exploration teams active in four countries simultaneously, there were also site visits by technical advisers to the Company's projects in Morocco and Ethiopia and higher costs were incurred for assaying of samples. Administration costs in the quarter were reduced from Q3 due to lower legal and professional costs and as the impairment of the Bella Yella licence that was relinquished in Liberia was recorded in the previous quarter.

Twelve months ended 31 December 2018

Income

Income from recharging costs to JV partners reduced from £401,000 (2017) to £90,000 (2018) primarily as a result of the discontinuation in the third quarter of 2017 of the JV arrangement with JOGMEC on the Tigray-Afar licence in northern Ethiopia. Recharged costs in 2018 related mainly to the JV arrangement with Canyon on the Birsok and Mandoum licences in central Cameroon. Other income in 2018 was derived primarily from a fair value gain of £282,000 on the group's investment in Canyon; this was on top of a gain on this investment in 2017 of £129,000.

Expenses

Exploration costs increased from £556,000 (2017) to £631,000 (2018, see note 6). This reflected an increase in the number of licences incurring spend from nine in 2017 to nineteen in 2018, including the six additional Mali licences incorporated from Legend's portfolio. The Group's exploration team increase in the year from the addition of former Legend employees. The pattern of spend reflected a more even spread between projects, and a reduction in some areas as projects reached JV-ready status. Cameroon was the highest area of spend in both years (2018: £146,000 and 2017: £220,000). The Group's newest area of operation, Côte d'Ivoire, incurred £44,000 of cost (2017: £nil).

By nature of spend, operations costs in Africa increased most significantly (34%), compared to an 11% increase in local administrative expenses and an 11% decrease in in-country travel costs.

Administrative expenses in the Income Statement covers UK costs, including geologists and their travel to Africa, as well as UK office overheads and group operations (see note 7). Overall these costs fell from £1,497,000 to £1,221,000, a reduction of 18% (see also financial KPI's). The main reduction was in employee costs (see note 10), from £1,092,000 to £746,000, due to the bonuses in 2017 paid to directors and employees (2018: £1,500 and 2017: £301,000). The main increase in administrative expenses was for legal and professional fees, from £140,000 in 2017 to £203,000, which reflected the increased complexity of the Group since its listing on London's AIM in August 2017, the Plan of Arrangement with Legend in January 2018, the private placement completed in April 2018 and the dual listing of the Company on Toronto's TSX-V in June 2018.

IPO and acquisition related costs expensed in the Income Statement fell from £372,000 to £19,000, with a high proportion of the costs for preparing the Plan of Arrangement with Legend being incurred in 2017.

Liquidity and Capital Resources

The net assets of the Group jumped from £1,077,000 (2017) to £5,266,000 (2018) owing to the increase of £3,920,000 in intangible assets, £3,800,000 of which was derived from bringing the six gold exploration licences in Mali on to the balance sheet from Legend. In addition, the value of investments increased due to the fair value gain of £282,000 on the Group's holding in Canyon, and an increase in the cash balance of £202,000 (see below); trade and other receivables dropped by £32,000 due to lower prepayments and trade and other payables increased by £189,000 due to higher accruals and Legend liabilities taken on by the Group.

The values of the intangible assets of the Group are reviewed at each reporting date (see note 16). During 2018 impairments totalling £20,000 were made to two licences, Bella Yella in Liberia and Negash in Ethiopia, in which the Group decided to discontinue its operations and relinquish the licences.

The cash balance of the Group increased from £523,000 (2017) to £725,000 (2018). The cash increase in the year of £202,000 (2017: £107,000 increase) resulted from the proceeds of share and warrant issues of £2,258,000 offset against operating spend of £1,802,000 and investing spend of £270,000.

The fundraising announced in April 2018 was a non-brokered private placement of 27,391,616 units at an issue price of C$0.15 with existing and new institutional and private investors. Each unit comprised one share plus a warrant for the purchase of one additional share at a price of C$0.30, exercisable within five years.

Based on the spending profile of 2018, the cash balance at the end of the year will be insufficient to fund operations for the whole of 2019. The Group will continue to preserve cash but recognises that it will be necessary to either, or a combination of, raise additional funding, sell its equity position in Canyon or enter joint venture agreements which include cash pre-payments within the next twelve months.

The directors are confident, based on the experience of raising finance in each of the two previous years, the liquidity profile of Canyon and the signing of a Letter of Intent for a JV with an ASX-listed company after the end of the period, that the necessary finance will be forthcoming, and have prepared the financial statements accordingly on a going concern basis.

SUMMARY OF QUARTERLY RESULTS

There has not been a material change in the underlying costs of the business during 2018 as the scope of operations, and the size of the team have remained largely the same since the completion of the Plan of Arrangement with Legend. in January 2018, which brought in the six Mali gold exploration licences. There has been an increase in overheads from 2017 to 2018 due to the requirements relating to the Company's listing on the TSX-V since June 2018, and also due to the company receiving its first licence grant in Côte d'Ivoire in March 2018.

The variable costs that have resulted in the main quarterly fluctuations in the table above are as follows.

The drop in Costs recovered from JV partners after Q1 2017 was due to the cessation of the JOGMEC JV on the Tigray-Afar licence in Ethiopia during Q3 2017.

The main variations in Exploration costs are due to changes in the level of onsite activity, with additional costs to transport geologists to site including flying UK geologists to Africa, equipment rentals and maintenance and use of causal labour. The most significant cost is for assaying samples including the transport of samples to the assaying labs. Other costs which cause variations between quarters are licence renewals, annual audit costs and local taxes. Exploration licences and land rents, although a significant cost to the business, are capitalised in line with the Company's accounting policies and do not generally affect the quarterly results.

IPO and acquisition costs, and to a lesser extent Administration costs, were impacted by the recording of non-capitalised costs in relation to the listing of the Company's shares on the AIM in London in August 2017, the dual listing of the Company on the TSX-V in Toronto in June 2018, and the Plan of Arrangement with Legend in January 2018.

The change in the Fair value gain on investment is derived from the value of shares in Canyon (ASX: CAY), which have varied in price between A$0.09 and A$0.29 during the year, and which are subject to further fluctuation as they are denominated in Australian dollars.

OFF-BALANCE SHEET ARRANGEMENTS

The Company had no off-balance sheet arrangements.

RELATED PARTY TRANSACTIONS

The Company entered into a number of transactions with key management personnel. The remuneration of key management personnel includes those persons having the authority and responsibility for the planning, directing and controlling of the activities of the Company are as follows.

The above payments for director compensation are payments made in the normal course of business. The amounts paid for these services are negotiated in good faith by both parties and fall within normal market ranges. The Remuneration Committee reviews executive compensation annually. The Board of Directors considers any changes recommended by the Remuneration Committee and approves these changes if appropriate.

In each year directors may choose to defer some of their remuneration, whether this is salary or company pension contributions, until such time as the Company has either the headroom to be able to allot further shares to its directors, or has the liquid resources available to be able to settle the deferred amounts in cash. Deferred remuneration is recorded in the accounts by way of an accrual. At the end of 2017 an insufficient accrual had been recorded in respect of all the remuneration which had been deferred up to that point. A correction was made to the accounts during 2018, which means that the charge for the year appears higher than the salary or fees due for the year, and higher than the cash amount that has actually been received by the directors.

The cost of directors' remuneration recorded in the accounts in 2018 was £413,473, comprising £401,803 for salaries and fees and £11,670 for pension contributions.

Of this figure, £323,083 was in respect of the financial year 2018, made up of £300,833 for salaries and fees and £22,250 for pensions. The remainder was a correction in respect of prior years.

Of the remuneration payable for 2018, £185,825 was paid in cash (£183,500 salaries and £2,325 pension), and no remuneration was settled in equity. £137,258 was deferred and remained outstanding at the reporting date. The total value of deferred remuneration for 2018 and prior years at the end of the year was £268,070.

All balances due to or from related parties are included in trade or other payables or trade and other receivables. The employment contracts with senior management are ongoing monthly commitments which can be terminated by either party with sufficient notice.

The following are the related party balances at 31 December 2018 and 31 December 2017.

Canyon Resources Ltd

David Netherway is a director and shareholder of the Company. He is also a director of Canyon Resources Ltd, which is listed on the Australian Stock Exchange. Altus has a joint venture arrangement with Canyon in relation to the Birsok and Mandoum projects in central Cameroon. Altus incurs and recharges expenses to Canyon. As at 31 December 2018, the balance owing to Altus was £37,550 (31 December 2017: £31,468).

Seabord Services Corp.

Michael Winn is a director and shareholder of the Company. He is also the controlling party of Seabord Services Corporation ("Seaboard"). Seabord has an agreement with Altus to provide Chief Financial Officer services and administrative support to Altus. As at 31 December 2018, the balance due from Altus was £44,775 (31 December 2017: £nil).

Aegis Asset Management Ltd

Three of the directors and shareholders of the Company are also directors of Aegis Asset Management Ltd ("Aegis"), which was formerly a subsidiary of the Company. Altus incurs some incidental costs which it recharges to Aegis. As at 31 December 2018, the balance due to Altus was £360 (31 December 2017: £nil).

CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

In the application of the Group's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.

Critical Judgments

Share based payments

Estimating fair value for share based payment transactions requires determination of the most appropriate valuation model, which depends on the terms and conditions of the grant. For issues of shares in respect of debt the Company values the shares based on the lower of the closing price on the AIM or TSX-V of the shares on the prior day or on the volume weighted average for a reasonable period determined by management. For the grant of share options or share warrants, the Company uses the Black Scholes Model. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of any share option or appreciation right, volatility and dividend yield and making assumptions about them.

Stability of Joint Venture Partners

The stability of the Group's joint venture partners is periodically reviewed in determining the likelihood of future funding for related projects.

Impairment of Deferred Exploration Costs

Deferred exploration costs had a carrying value as at 31 December of £4,071,870 (2017: £151,875). Management tests quarterly whether deferred exploration costs have a carrying value in accordance with the accounting policy stated in note 16 in the annual audited consolidated financial statements of Altus Strategies plc. Each exploration project is subject to a quarterly review either by a consultant or a senior Company geologist to determine if the exploration results returned to date warrant further exploration expenditure and have the potential to result in an economic discovery. This review takes into consideration long-term metal prices, anticipated resource volumes and grades, permitting and infrastructure, external factors affecting the project, as well as the likelihood of on-going funding from current or potential joint venture partners. In the event that a project does not represent an economic exploration target and results indicate that there is no additional upside, or that future funding from joint venture partners is unlikely, a decision will be made to discontinue exploration. A further review of the recommendations of the consultant or senior Company geologist is then performed by management. The Directors have reviewed the estimated value of each project prepared by management and do not consider any further impairment necessary.

FINANCIAL RISK MANAGEMENT

Altus's strategy with respect to cash is to safeguard this asset by investing any excess cash in very low risk financial instruments such as term deposits or by holding funds in the highest yielding savings accounts with major United Kingdom banks. By using this strategy, the Company preserves its cash resources and can marginally increase these resources through the yields on these investments. The Company's financial instruments are exposed to certain financial risks, which include currency risk, credit risk, liquidity risk and interest rate risk.

Currency Risk

The Company's functional currency is the Pound Sterling, and major purchases are transacted in Pounds Sterling, US Dollars, Canadian Dollars, West African Francs, Ethiopian Birrs, Moroccan Dirhams and Liberian Dollars. The Company's head office expenditures are mainly incurred in Pounds Sterling and the majority of its exploration costs are incurred in the local African currencies. Some of the Company's subsidiaries have functional currencies other than Pounds Sterling. The Company is therefore exposed to unrealised foreign currency on the translation of the subsidiary's net assets. Management believes the foreign exchange risk derived from currency conversions is not significant to its operations, and therefore does not hedge its foreign exchange risk. For the twelve months ended 31 December 2018, the Company had an exchange gain of £25,726 (2017: £14,318) which was not material to its operations and an unrealised loss on retranslation of net assets of its subsidiaries of £76,992 (2017: £nil).

Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in the market interest rates. When the Company has sufficient cash, it is invested in term deposits which can be reinvested without penalty after thirty days should interest rates rise. As at 31 December 2018 the Company did not have any interest-bearing loans. Accordingly, the Company does not have significant interest rate risk.

Credit Risk

Credit risk is the risk that one party will cause a financial loss for another party by failing to discharge an obligation. The Company's credit risk is primarily attributable to receivables. The Company has no significant concentration of credit risk arising from operations. Financial instruments included in receivables consist of trade receivables and amounts due from associates.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company's objective is to ensure that there are sufficient committed financial resources to meet its current obligations and its future business requirements for a minimum of twelve months. Altus completed a private placement in April 2018 raising gross proceeds of approximately C$4.1 million (£2.3 million) and consequently has sufficient working capital to discharge its current liabilities and fund ongoing operations for the next twelve months.

FINANCIAL INSTRUMENTS

The Group completed an assessment of its financial assets and liabilities as 1 January 2018. The following table shows the original classification of the Group and Company's financial instruments under IAS 39 and the new classification under IFRS 9.

The adoption of IFRS 9 did not result in any changes to the Group and Company's financial statements.

Fair Values

The Company's financial instruments consist of cash and cash equivalents, trade and other receivables, investments, and trade and other payables. Financial instruments are initially recognized at fair value with subsequent measurement depending on classification as described below. Classification of financial instruments depends on the purpose for which the financial instruments were acquired or issued, their characteristics, and the Company's designation of such instruments. The Company has classified its financial instruments as follows:

Financial instruments measured at fair value on the statement of financial position are summarized into the following fair value hierarchy levels:

a) Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

b) Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

c) Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

OUTSTANDING SHARE DATA

As of the reporting date of this MD&A, the Company had 177,782,686 ordinary shares issued and outstanding. There were also 28,603,477 share purchase warrants outstanding as follows:

* Exercise prices in GBP are determined by reference to the underlying Canadian Dollar price and the exchange rate as at 31 December 2018.

RISKS AND UNCERTAINTIES

No Assurance of Titles or Borders

The acquisition of the right to exploit mineral properties is a very detailed and time-consuming process. There can be no guarantee that the Company has acquired title to any such surface or mineral rights or that those rights will be obtained in the future. To the extent they are obtained, titles to the Company's surface rights or mineral properties may be challenged or impugned and title insurance is generally not available. The Company's mineral properties may be subject to prior unregistered agreements, transfers or claims and title may be affected by, among other things, undetected defects. Such third-party claims could have a material adverse impact on the Company's operations.

Mineral Property Exploration and Mining Risks

The business of mineral deposit exploration and extraction involves a high degree of risk. Few properties that are explored ultimately become producing mines. At present, none of the Company's properties has a known commercial ore deposit. The main responses to operating risks include: ensuring ownership of and access to mineral properties by confirmation that option agreements, claims and leases are in good standing and obtaining permits for drilling and other exploration activities. There can be additional risks involved in some countries where pending applications for claims or licenses can be affected by government changes to application procedures.

Some of the Company's mineral properties are located within or near local communities. In these areas, it may be necessary as a practical matter to negotiate surface access with these local communities. There can be no guarantee that, despite having the legal right to access a mineral property and carry on exploration activities, that the Company will be able to negotiate a satisfactory agreement with the existing land owners or communities for this access. Therefore, the Company or one of its joint venture partners may be unable to carry out exploration activities on a property. In those circumstances where access has been denied by a local community or land owner, the Company may need to rely on the assistance of local officials or the courts to gain access or it may be forced to abandon the property.

Altus may acquire properties through option agreements in the future. Acquisition of title to the properties under these kinds of agreements is only completed when all the option conditions have been met. These conditions generally include making property payments, incurring exploration expenditures on the properties and can include the satisfactory completion of pre-feasibility studies. If the Company does not satisfactorily complete these option conditions in the time frame laid out in the option agreements, the Company's title to the related property will not vest and the Company will have to write-off the previously capitalized costs related to that property.

Joint Venture Funding Risk

When appropriate, Altus seeks partners through joint ventures or option agreements to fund exploration and project development and the Company seeks to retain a royalty interest in its projects as well as receive milestone based payments. The main risk of this strategy is that funding partners may not be able to raise sufficient capital to satisfy exploration and other expenditure terms in a particular option agreement. As a result, exploration and development of one or more of the Company's property interests may be delayed depending on whether Altus can find another partner or has enough capital resources to fund the exploration and development on its own.

Commodity Price Risk

Altus is exposed to commodity price risk. Declines in the market prices of gold, base metals and other minerals may adversely affect its ability to raise capital or attract joint venture partners to fund exploration on its mineral properties. Commodity price declines could also reduce the amount the Company would receive on the disposition of one of its mineral properties to a third party.

Financing and Share Price Fluctuation Risks

Altus has limited financial resources, has no reliable source of operating cash flow and has no assurance that additional funding will be available to it for further exploration and development of its projects. Further exploration and development of one or more of the Company's projects may be dependent upon the Company's ability to obtain financing through equity issues, debt financing or the sale of some of its exploration properties. Failure to obtain this financing could result in delay or indefinite postponement of further exploration and development of its projects which could result in the loss of one or more of its properties.

Securities markets often experience a high degree of price and volume volatility, and the market price of securities of many companies, particularly those considered to be development stage companies such as Altus, have experienced wide fluctuations in share prices which have not necessarily been related to their operating performance, underlying asset values or prospects. As a result, there can be no assurance that the Company will be able to attract additional capital or whether share prices will be strong to enough to make private placements advisable.

Political and Currency Risks

The Company is operating in African countries, where there is a higher risk of political uncertainty and instability. The Company regularly monitors the political situation in each country in which it operates. Changing political situations may affect the manner the Company operates. The Company's equity financings are sourced in Pounds Sterling and Canadian Dollars but it incurs a significant portion of its expenditures in US Dollars and West African Francs, Ethiopian Birr and Moroccan Dirham. There are no currency hedges in place. Therefore, a weakening of its funding currencies against the US Dollar, West African Franc, Ethiopian Birr and Moroccan Dirham could have an adverse impact on the amount of exploration conducted.

Insured and Uninsured Risks

During exploration, development and production on mineral properties, the Company is subject to many risks and hazards in general, including adverse environmental conditions, operational accidents, labour disputes, unusual or unexpected geological conditions, changes in the regulatory environment and natural phenomena such as inclement weather, floods, and earthquakes. Such occurrences could result in damage to the Company's property or facilities and equipment, personal injury or death, environmental damage to properties of the Company or others, delays, monetary losses and possible legal liability.

Although the Company may maintain insurance to protect itself against certain risks in such amounts as it considers reasonable, its insurance may not cover all the potential risks associated with its operations. The Company may also be unable to maintain insurance to cover these risks at economically feasible premiums or for other reasons. Should such liabilities arise, they could reduce or eliminate future profitability and result in increased costs, have a material adverse effect on the Company's results and cause a decline in the value of the Company's securities. Some work is carried out through independent consultants and the Company requires that all consultants carry their own insurance to cover any potential liabilities because of their work on a project.

Environmental Risks and Hazards

The activities of the Company are subject to environmental regulations issued and enforced by government agencies. Environmental legislation is evolving in a manner that will require stricter standards and enforcement and involve increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects, and a heightened degree of responsibility for companies and their officers, directors and employees. There can be no assurance that future changes in environmental regulation will not adversely affect Altus's operations. Environmental hazards may exist on properties in which the Company holds interests which are unknown to the Company at present.

Conflicts of Interest

The Company's directors and officers may serve as directors or officers of other companies or have significant shareholdings in other resource companies and to the extent that such other companies may participate in ventures in which the Company may participate, some directors of the Company may have a conflict of interest in negotiating and concluding terms respecting the extent of such participation. If such a conflict of interest arises at a meeting of the Company's directors, a director who has such a conflict will abstain from voting for or against the approval of such participation or such terms. In accordance with best practice and the laws of British Columbia, the directors of the Company are required to act honestly, in good faith and in the best interests of the Company. In determining whether the Company will participate in a program and the interest therein to be acquired by it, the directors will primarily consider the degree of risk to which the Company may be exposed and its financial position at that time.

Key Personnel Risk

The Company's success is dependent upon the performance of key personnel working in management and administrative capacities. The loss of the services of any senior management or key personnel could have a material and adverse effect on the Company, its business and results of operations.

Competition

The Company will compete with many companies and individuals that have substantially greater financial and technical resources than the Company for the acquisition and development of its projects as well as for the recruitment and retention of qualified consultants and employees.

**END**