www.altus-strategies.com
ALTUS is an entrepreneurial team of resource professionals. Our business is to develop exceptional opportunities and our approach is to be an innovator, an investor and a valued partner. We are powered by the inspiration, the enthusiasm and the vision of our talented team members, who we are proud to work alongside and who combine to create an energetic and lateral thinking mindset in everything we seek to achieve.
RNS Release - Interim Management Statement
ALTUS RESOURCE CAPITAL LIMITED
Interim Management Statement for the period 1 July 2011 to 18 November 2011 (the "Period").
Overview
Altus Resource Capital Limited (LSE:ARCL) (the "Company") is a Guernsey registered, closed-ended investment company which listed on the Specialist Fund Market of the London Stock Exchange on 30 June 2009 and the Channel Island Stock Exchange on 22 December 2009.
The Company announces that the unaudited net asset value at the end of the Period was £77.1 million, representing a gain of 0.7% over the Period and a rise of 104.5% since the Company's launch on 30 June 2009.
Investment Objectives and Policy
The Company's objective is to realise capital growth from a concentrated portfolio of junior resource equities and to generate a significant capital return to shareholders.
The Company invests in companies engaged in the exploration, development and mining of metals and minerals with a focus on companies that operate in the gold sector. Portfolio companies will be predominantly, but not exclusively, listed or quoted on either UK markets or other recognised stock exchanges including the Canadian and Australian markets.
Financial Highlights and Investment Review by Altus Capital Limited
The unaudited net asset value of the Company increased to £77.1 million over the Period, showing a 0.7% rise since the beginning of the Period and a 104.5% rise since the Company's launch on 30 June 2009.
At the end of October 2011, the Company's portfolio comprised 26 holdings in junior mining and exploration companies, exposure to gold via exchange traded funds (ETFs) and an investment in Altus Global Gold Limited which is an open-ended vehicle seeded by the Company and focused on the mid-tier gold sector. The Company has acquired its positions in the market and through participating in new equity issues.
The Period has been dominated by the Eurozone sovereign debt crisis and continued uncertainty of the global economic recovery. Government bond yields in a number of European countries have risen to record levels. The crisis has been focused on Greece and Italy where, in recent weeks, bond yields have reached levels seen as unsustainable by many commentators and the prime ministers of both countries have been replaced by unelected leaders in attempt to contain the escalating situation.
In line with this economic uncertainty, volatility has increased significantly with the Chicago Board Options Exchange Volatility Index (VIX) almost doubling to an average of 33.6% since the middle of July relative to the 17.6% over the preceding three month period. The gold price, which has also seen a dramatic increase in its volatility, has benefitted from the global economic uncertainty given its safe haven characteristics. The gold price rose to an all-time intra-day high of US$1,920 per ounce in early September, fell back to US$1,533 per ounce later in September but has risen steadily since then to close the Period at US$1,725 per ounce.
Against this backdrop the performance of the Company's net asset value has been volatile. The Manager has sought to increase the Company's exposure to quality gold equities taking the gold proportion of assets under management from 51% to 66% over the Period. Significant investments have been made in Detour Gold which is fully financed to develop its 15 million ounce project in Canada. In addition, the Company seeded Altus Global Gold Limited, an open-ended investment company which is managed by Altus Capital and focused on mid-tier gold equities. This investment represented 6.5% of the Company's assets at the end of October 2011. The launch of Altus Global Gold and investment by the Company reflects the Manager's conviction that the fundamentals for the gold price remain robust and that the disconnect that has opened between the gold price and gold equities will begin to close. It will give the Company an added generic exposure to slightly larger capitalisation gold mining companies.
The Company retains a strong cash position at 15.1% of assets under management at the end of the Period.
Outlook - As provided by the Investment Manager, Altus Capital Limited
The outlook for the global economy and the Eurozone in particular remains uncertain. Further bailouts of Eurozone countries seem inevitable and a "soft landing" for the Chinese economy is not yet assured. Markets are therefore expected to remain extremely volatile and the Manager does not rule out the risk of a severe market correction triggered perhaps by a disorderly Eurozone default.
Against this backdrop the Manager remains convinced that the fundamentals for gold as a safe haven investment remain intact. While performance of the Company's net asset value will be volatile, the portfolio is positioned to take advantage of a strong gold price and a closing of the disconnect that has opened up between gold and gold equities. Further, the strong cash position will be maintained to allow the Manager to take advantage of opportunities that these volatile markets may present.
Investment Allocation
At 31 October 2011, the Company's assets were allocated in the following approximate proportions:
Asset Allocation by Commodity
| Asset Allocation by Geography
| ||||||
Gold (& Silver) | 66.4% | Africa | 37.9% | ||||
Bulk Minerals | 3.8% | Europe | 9.0% | ||||
Base Metals | 9.2% | North America | 11.1% | ||||
Energy Minerals | 4.3% | South America | 0.2% | ||||
Platinum Group Metals | 1.1% | Central Asia & Russia | 4.6% | ||||
Diamonds | 0.0% | South East Asia | 4.9% | ||||
Other | 0.0% | Australasia | 5.5% | ||||
Cash | 15.1% | Other (ETFs) | 11.9% | ||||
Cash | 15.1% | ||||||
Asset Allocation by Development Stage
|
| ||||||
Production | 41.3% |
| |||||
Development | 29.4% |
| |||||
Exploration | 8.7% |
| |||||
ETF | 5.4% |
| |||||
Cash | 15.1% |
| |||||
Material events
Other than the information set out above, the Board is not aware of any events during the Period, which would have had a material impact on the financial position of the Company.
Investor Information
The latest available information on the Company can be accessed via www.altrescap.com.
This document has been issued by, and is the sole responsibility of, Altus Resource Capital Limited (the "Company") and is for information purposes only. It is not, and is not intended to be an invitation, inducement, offer, or solicitation, to deal in the shares of the Company. The price of shares in the Company and the income from them may go down as well as up and investors may not get back the full amount invested on disposal of shares in the Company. An investment in the Company should be considered only as part of a balanced portfolio of which it should not form a disproportionate part. Prospective investors are advised to seek expert legal, financial, tax and other professional advice before making any investment decision.
By order of the Board
Altus Resource Capital Limited
Administrative Enquiries: Investment Manager: Shareholder Enquiries:
Anson Fund Managers Limited Altus Capital Limited Nimrod Capital LLP
Tel: +44 (0) 1481 722 260 Tel: +44 (0) 1235 511767 Tel: +44 (0) 20 3355 6855
info@altus-cap.com info@nimrodcapital.com
E&OE - In Transmission
END OF ANNOUNCEMENT
This information is provided by RNS
