Hi, all. Thank you for attending this Q2 call for Elemental Altus . We'll just give another minute here as a few people are still joining, and we should kick off momentarily. I think we're ready to go now. Thank you everyone for coming in today on the 19th of August, 2025, to run through Elemental Altus Q2 financials. With us today, you've got myself, Frederick Bell, the CEO, and David Baker, the CFO. In terms of an update on the company and where we're at, I think it's the same story we've telegraphed really for the last two quarters, which has been continuing cash build. We've paid down the company's debt. We've had record revenue for Q1 and for Q2, putting us in a very strong position.
We also had a payment related to the mainstream previously that we received in April this year that was just under $10 million equivalent, combined with the Korali- Sud royalty that started its first payments to us from Q1 onwards. I think for both of those material events, it puts us in a position today where we have, between the credit facility and cash on the balance sheet, approximately $80 million that we can deploy, both from cash on hand and credit facilities. Also materially during the quarter, we had a new investor that came on the register in Tether Investments. I think in terms of their desire to grow the company and for us to continue to build out the portfolio, very strong backing from them to really deploy that capital and puts the company in the strongest position.
It was already in the strongest position it's ever been in, but puts us in the strongest position going forward in terms of our ability to progress acquisitions and build the company forward. I won't say more than that, and I will hand over to Dave to run through the quarter's numbers and talk through some of the nuances in a bit more detail.
Super, thanks Fred. Yeah, excellent second quarter across all metrics. Adjusted revenue, $10.5 million, that's doubled year- on- year. Adjusted EBITDA of $8.8 million, that's up 150% year- on- year. I think more importantly, adjusted cash flows, operating cash flows here at $14.4 million, that's up about $1.5 million from this time last year. That's really reflective of our record Q1s. We got that bulk first revenue from Korali- Sud that was all received in Q2. This is really reflective of a strong production base. Nearly 3.2 thousand GEOs in Q2, up 44%. A record of GEOs of nearly 7.8 thousand for H1, it's a record for the company. That puts us on track to hit GEO guidance of 11.6- 13.2 thousand. That's up nearly 40% year- on- year at the midpoint.
With the gold price where it is, we're very happy to increase revenue guidance to $35 million- $40 million. That's a record for the company. Korali- Sud, a lot of the growth today has been driven by Korali- Sud. It's already generated $9.1 million year to date in royalty revenue. On top of that, it's also triggered two milestone payments totaling $3 million. It's a real, an excellent contributor to the portfolio. Balance sheet is as strong as it's ever been since the beginning of the company. As of today, we have $30 million, $3-0 million in the bank. That, alongside with our credit facility with CIBC and RBC, $50 million undrawn, gives us $80 million of liquidity, which I think is excellent for a company of our size. These results are underpinned by the Cornerstone producing royalties. Let's talk about Karlawinda and Caserones .
A couple of excellent quarters on our Cornerstone assets, over 32,000 ounces produced. At Karlawinda in the quarter, that achieved the upper end of their guidance of 117,000 ounces to June, which is excellent for them and excellent for us. Most importantly, they've had their expansion approved. They have regulatory approval for that expansion, which gets them to 150,000 ounces of gold a year. That gives us a 30% uplift that we get a free carry on and, yeah, strong future upside for our royalty there. An excellent quarter at Caserones as well. Lundin Mining have maintained copper guidance of 115 -125 thousand tons of copper. We see some upside in these numbers. Lundin are talking to higher grades expected in Q2, driven by strong cathode production. We're very confident that I'll hit guidance there. Caserones is just a wonderful cash flow contributor for the company.
Alongside the Cornerstone assets, our other producing royalties are doing exceptionally well. Bonikro had a great quarter, so 23,500 ounces, up from 17,000, nearly 18,000 ounces last year. Obviously, we now have the full contribution from Bonikro following the AlphaStream acquisition last year. Production's on track, expecting higher grade materials in the second half of the year through 2027. Bonikro is producing some pretty staggering numbers at these current gold prices. We had a higher than expected quarter from Korali-Sud , again another excellent performer. Co-processing, and that was really driven by the ability to co-process materials. Blending Korali-Sud with Sadiola, that commenced in May. We really think that is going to be a serious contributor to the long-term nature of the Korali-Sud royalty. $2.5 million, again heavily weighted to Q1 because of all of that revenue that was received in Q1 that was from 2024 production.
Korali-Sud already exceeded our expectations year to date. Wahgnion, we have still paused accruing revenue at Wahgnion while the government undertakes the external audit. We are in communication with management there and the external auditor, and we expect payment in 2025 from Wahgnion. These royalties, they're translating, as you can imagine, into record financial outcomes. In terms of the numbers, as I said earlier, adjusted revenue has doubled year to date, so $10.5 million are translating to an adjusted EBITDA of $8.5 million and operating cash flow. We did book higher depletion and higher tax accruals as a part of cleaning up the business. We booked those in Q2, but still managed to turn a small profit and taxes higher in the period due to stronger revenues in the period as well. Behind these numbers, we've put together a free cash flow bridge.
You can see that revenue plus Caserones dividends. Caserones dividends are there after tax. We've got higher tax outflows than quarter- on- quarter. That's just due to stronger revenues and working capital. The timing working capital reflects Korali-Sud inflows in the period, which really leads to that free cash flow of $9.7 million, showing really that scalability of the model that we have. If we step back and then look at how that's impacted the cash position, we started the quarter with $4.8 million of cash in the bank. That $9.7 million of free cash flow, plus the settlement that we received from Ming, gets us to $24.5 million in the bank at the end of the quarter. Nearly $20 million of growth in cash through the quarter. Since subsequently, we've had royalty revenues come in. We've now got $30 million in the bank as of today.
This really does show through on our operating results here. I'll just point out that we still do treat Caserones as a profit of associate. That comes in the gain there. That's the post-tax profits. It comes in as that share of profit from associate item. We also had a, and we have an investment in Aterian plc. We also use the same treatment, associate treatment for Aterian. Given we've ticked down below 20%, we've reclassified that as an investment. We recorded a non-cash impairment of $1.46 million, but that will be a lot easier to monitor for us going forward. In terms of the results, the direction of travel is pretty clear. Adjusted revenue doubling year on year, that $10.5 million. GEOs up 44% year- on- year to nearly $3.2 million. We do reiterate guidance of that 11.6- 13.2 thousand ounces.
We have upgraded that revenue guidance using a $3,000 gold price of $35 million- $40 million for 2025. EBITDA growth is following exactly the same trajectory, up 155% year- on- year. These EBITDA and margins are at record levels for the company. That growth is driven by the scale, cost discipline, and then combined with strong gold prices for this track record of sequential EBITDA growth through 2025. This really does come through to the cash generation of the company. We are at this inflection point where this higher revenue is translating into cash flows. Those record 2021 revenues fall into 2022 operating cash flows and really show that scalability of the model. Higher revenues are just directly driving higher cash flows with that continued strong exposure to rising gold and copper prices, which we are completely unhedged.
We are, as a company, in the strongest financial position in our history, supported by long-term investors. As Fred said, Tether Investments joined the register in the quarter, which is fantastic, and we're really supportive of what they're trying to achieve and the path of growth that we have ahead of us with Tether. We also have incredibly supportive shareholders, not least Paul Stevens, Adrian Day, Deutsche Ballotine, Extract Capital. Caserones target price not updated for today's updates, but price of today was just over $2.43, so it's still plenty to go in the share price. The balance sheet is as strong as it's ever been, $30 million in cash in the bank, zero debt, and a fully undrawn $15 million facility for transactions.
Fred, I might pass back to you to run through the highlights, and then we can open up the floor to Q&A, which is available in the Q&A section of your app.
Thank you, Dave. I appreciate everyone. That was a relatively rapid run-through, very efficient from Dave there of the numbers. If anyone's got some follow-up questions after this, always welcome to talk through those. I think the key aspect for the company is really when you look at it in the bigger picture, this was a company that started, and I think our biggest hurdle in year one to year four was really lack of capital. The fact that we have probably in our history syndicated transactions worth, I think, 5x probably worth a combined $100 million. That is a position that we're not in today, where if we saw those opportunities, we could progress them ourselves.
I think that's a key difference in terms of where the company sits when you look at the bigger picture vs where we have been historically, with a team that has more experience than we have ever had. We've transacted across multiple jurisdictions, across different commodities, many different counterparties, and from exploration stage all the way through to producing assets. We're today in a place where we've got organic growth embedded in the portfolio. We have record cash on the balance sheet, ability to deploy that cash as well. I think one thing that we didn't touch on too much, but it's a good example from our portfolio, and that was the Leverton royalty that was acquired by Genesis in the quarter. For us, that's been a really key development asset that we haven't been able to say a lot about because of the previous owner indirectly, Shandong.
I think now in the hands of a very well-run mid-tier Australian miner in Genesis , I think there's going to be a lot of progress on that royalty over the coming years in terms of adding value. For us, good to see an asset like that that's been in our development portfolio since 2021 really go into a good home with a good operator in WA, and we should have some good news flow from that over the next 12-18 months. I think that really summarizes it and open the floor to any questions.
Thanks, Fred. We can talk to a question from Adrian. Adrian Day, hey Adrian, hope you're doing well. There's a question, is there a cost to the unused line of credit? Yeah, absolutely, Adrian. There is a standby fee that's typical for these facilities. Ours is 23% of the margin. If the margin on top of SOFR on our facilities is our low end, that's 2.75%. We'd pay 23% of that, so just less than a bit less than 1%, a bit more than 0.5% on the unused side of credit. The reason that that is a cost for us, it really does allow us to get, that's the cost of being able to access that facility at a moment's notice. That's a fully credit-approved facility available to us. There is a standing standby charge for that.
Fred, maybe from Brian MacArthur, can you go through when you expect the Diba milestone payments?
Yes, and for the benefit of everyone else, this relates to our Korali-Sud royalty, which has been renamed from Diba with Allied Gold. That went into production at the end of last year. We received our first royalty payments following Q1 and our second royalty payments now. That royalty also had some milestone payments associated with it. We received the first one and we actually had a second and third milestone payment related to commercial production. There is also going forwards milestone payment related to hitting production thresholds. I think we should have an update on that imminently. I think with Korali-Sud , we had some of those payments along with the permits in Mali took a bit longer from the end of last year to come through.
I think it was on the 5th or the 7th of May that Allied Gold got permission for coprocessing there, which is really positive for the royalty because it means that they can blend the ore from our license with what they have at Sadiola already, which is a better result for the mine. It's a better result for us as royalty holders. It's a better result for the government. I think some of those calculations on the amounts and payments, there's a bit of a backlog there, but we should get all of that sorted in this quarter.
Absolutely. Another question from Adrian, Fred, about opportunities in the space. I think Adrian's referencing consolidation, talking to the difference between some of the royalty companies that are in the $500 million range and then the gap to Triple Flag and Osisko at $5 billion.
You know, look, it's an interesting comment. Thank you, Adrian. I think if you look back over the last 5 or 10 years in the royalty space, you've seen people like Nomad, Mavericks, and more recently Sandstorm, who have sat in that sort of $500 million to $2.5 billion space. You have seen them all being consolidated, acquired, merged, combined. The result is there is that enormous gap now between where I think most of the junior royalty companies are and where the really two, what will be remaining mid-tiers in Triple Flag and a Osisko sit. I think there's a huge opportunity there, obviously. For us, we've very much got, we have the view that we have the ability with our strength of our balance sheet to both grow on an organic basis, but also looking at public and private portfolios where they make sense.
We have always done that throughout our company's history. As the name says, Elemental and Altus, we have done a merger in the past. I think very open to it where it makes sense. I think that for us in the short term, we have a number of royalty opportunities that have been very keen to progress, but certainly keeping an eye on where we can do things that do make sense and move up into that gap that you alluded to.
Perfect. Thanks, Fred. I'll do a quick one. Question from James. James Fraser on, are we earning interest on the cash balance? If so, what percent? Hi, James. Yeah, absolutely. We sweep all excess cash into an instant access account, and that jumps around with Canadian prime rates, but at the moment, about 4% we're getting on the cash balance. Fred, we've got two questions. One from Pierce Lord and relates into a larger question from Stefan Gleason on, do we have any guidance or timeline on the U.S. listing? Any U.S. listing and how beneficial do you think that will be to accessing new investors, increasing liquidity on the stock, which was Pierce's question, etc.
Thank you, Stefan and Pierce, for those. I think, look, we have talked to this probably with both of you individually, but we've also had this question from shareholders and the management view has always been that the U.S. listing absolutely makes sense and it's a matter of when, not if. I think that you saw at our AGM, we had an approval for a share consolidation that we included in those materials. I think that for us, looking at that U.S. listing, we're probably the only one of our peer group that doesn't have the U.S. listing. Nowadays, that market accounts for the vast majority of trading in all of our peers. It definitely makes sense. We're working on progressing that. When we can, we will definitely say something. I think for us, that will be one of the key actions to improve liquidity as well moving forward.
Perfect. Question from Paul. Paul Rankin. Paul, I hope you're doing well. Is there any evidence of cost inflation accelerating across the portfolio? I can chime in, I guess, to start with. The beauty of the royalty model is that we are somewhat insulated from the costs at a mine level. Obviously, so long as the costs aren't so high, it affects the overall and underlying profitability of the mine. Not directly. I would point that the only sort of producing NPI in our portfolio is one of our little royalties on Mount Pleasant, operated by Zijin. That actually had a record quarter for us. Small numbers, only a couple hundred thousand dollars. That actually, the only royalty we have linked to profitability had a record quarter on that front. Clearly, at that operation, the rise in Australian dollar gold prices is outpacing on the ground costs.
It's going to be different at every operation. Fred, maybe there's a sort of higher level question from J.J Sowers. Is there a take on the, and maybe relates to Tether as a shareholder, what's our take on the Trump administration revaluing gold and/or linking to future treasury bonds, maybe as a real-world asset on the blockchain? Sort of a long-term view on gold and tokenized gold.
Thank you, JJ, for that question. I think probably too specific for us to answer with any degree of accuracy or certainty on this call. It's probably a good point to mention that it's certainly, I think, attracted a lot of interest in Tether involvement in the space coming in. They have been publicly on the record as a large purchaser of physical gold in the market. This was the first move they have made into the mining space as such and into a royalty company. For us, it's actually been, I think it's been very positive to have someone with such an exposure to gold and desire to increase their exposure to precious metals as our major shareholder moving forward and really with the ability to help the company grow.
They're coming in at a point where we were already going to hit record quarters in terms of the company's performance before the gold price and without Tether . The combination then of the gold price and Tether Investments' involvement, it's really put the company in a very strong position. I think that it's interesting to see investors in that space starting to perhaps make a move over and increase their exposure in the gold space. It'll be definitely interesting to watch going forward. For us, really focused on the day-to-day business of adding value through good quality royalty acquisitions and building out the portfolio. I think as we have said in the last maybe two of these calls, I think we always knew we'd be in a very strong position coming into the first half, second half of this year as a company.
I think as we sit today, this is a great opportunity for us to really make some good quality acquisitions, build out the portfolio, work on improving liquidity that some of the shareholders mentioned with some specific plans on that front. I think putting us in a very strong position moving forward.
Perfect. Thanks, Fred. That is the end of the questions. No more questions. Maybe just head back to you, Fred, to sum up.
Thank you everyone for joining. As ever, we actually do enjoy getting questions and calls from shareholders or investors. Please, if there is anything that you think of afterwards, feel free to drop us an email or try and give us a call and we'll get back to you as soon as we can. Thank you as well for your time today listening in and wish everyone the best for the rest of the day.