Elemental Altus secures up to 1.4% NSR for HCK Lithium Project

Elemental Altus Royalties (TSX-V:ELE) has acquired a net smelter return (NSR) royalty of between 1.25% and 1.4% from critical metals explorer and developer Aterian (LSE:ATN) over the HCK Lithium Project in the Republic of Rwanda.

Elemental Altus currently holds about 16% of the issued shares of Aterian, coupled with rights to subscribe for new shares comprising approximately 6% of the share capital of Aterian.

The company has acquired the NSR for £200,000 ($379,500) via extinguishment of existing debt. Aterian will transfer a 1.25% NSR royalty capped at US$31.25 ($47.4 million) over a large area, or up to 1.4% capped at US$35 million over a reduced area.

The actual percentage is dependent on the royalty coverage being either greater or less than 3,100 hectares. The licence base is defined as the total aggregate number of hectares of land under the exploration permit which covers HCK and the Musasa Project. 

In the event the licence base exceeds 3,100 hectares, Elemental Altus will be apportioned a 1.25% NSR royalty, whereby the company will have two royalties granted on both the HCK and Musasa licences on the same terms. 

Should the licence base not exceed the 3,100 threshold, the NSR royalty will be 1.4% covering just HCK. 

HCK is currently held under a joint venture (JV) agreement between Kinunga Mining — itself a JV between Aterian (70%) and HCK Mining (30%) — and Rio Tinto (ASX:RIO), under which Rio Tinto is manager and operator.  

Elemental Altus CEO Frederick Bell says the company looks forward to following the developments on-site as valuable data is collected on the lithium, tantalum, tin, and niobium prospects to gain an understanding of the exploration potential and define drill targets. 

“We are excited to add another highly prospective exploration royalty to the portfolio which is being advanced by Rio Tinto,” Bell says. 

“Historical work at the HCK project has identified 19 separate LCT (lithium-caesium-tantalum) pegmatite zones offering the prospective scale necessary to attract a major partner such as Rio Tinto. 

“The transaction was completed on a non-cash basis allowing Elemental Altus to maintain its cash balance.”

HCK covers a total landholding of 2,750 hectares in southern Rwanda about 65km southwest of Kigali and 20km northwest of Huye within the Southern Province. 

On 1 August 2023, Aterian signed a definitive earn-in investment and joint venture agreement with Rio Tinto and Kinunga Mining. The agreement is for the exploration and development of lithium and by-products, and outlines an option for Rio Tinto to invest US$7.5 million in two stages to earn up to a 75% interest. 

Aterian currently holds a diversified African portfolio of critical metals projects. Elemental Altus currently holds several royalties over other projects owned by Aterian.   

Collingwood Capital Partners acted as financial advisor to Aterian in the sale of the HCK royalty. 

Write to Adam Drought at Mining.com.au

Images: Aterian
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Written By Adam Drought
Born and raised in the UK, Adam is a sports fanatic with an interest in Rugby League and UFC/MMA. When not training in Muay Thai and Brazilian Jiu Jitsu, Adam attends Griffith University where he is completing his final year of a Communication & Journalism degree.