Interim Management Statement (4945G)

TIDMARCL

RNS Number : 4945G

Altus Resource Capital Limited

12 May 2011

ALTUS RESOURCE CAPITAL LIMITED

Interim Management Statement for the period 1 January 2011 to 28 April 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 GBP83.4 million, representing a decline of 9.0% over the Period but a rise of 121.1% 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 was GBP83.4 million or GBP2.10 per share at the end of the Period, representing a 9.0% fall since the beginning of the Period and a 121.1% rise since the Company's launch on 30 June 2009.

At the end of April 2011, the Company's portfolio comprised 28 holdings in junior mining and exploration companies and a single holding in a commodity backed ETF. The Company has acquired its positions in the market and through participating in new equity issues. While the Company has benefited from its exposure to junior mining equities with metal prices generally rising since the launch of the Company, it has suffered from volatile markets and in particular for junior mining equities over the Period.

Following the strength of both mining equity and metals prices in the second half of 2010, January saw a sharp pull back in both. Increasing political instability in North Africa and the Middle East between February and April caused oil prices to rise dramatically and added to the instability of global markets. This instability was compounded by the catastrophic earthquake and tsunami that struck Japan during March.

In this uncertain market, junior mining equities suffered downward pressure with limited liquidity and increased volatility. Industrial metals suffered from increasing concerns over the sustainability of the global economic recovery and the uranium sector was particularly adversely affected as a result of the unfolding nuclear crisis at the Fukushima nuclear plant.

Outlook

The outlook for the Company remains positive with further strength anticipated in gold and other metals prices and related junior mining equities.

Gold, after falling by 5.8% in January, rose 7.9% over the Period to close at US$1,531 per ounce on the 28(th) April and closing at an all-time high of US$1,564 per ounce on the 29(th) April before retreating to below the US$1,500 level. Silver has shown an even more dramatic rise, increasing 56.7% over the Period to close at a high of US$48.44 per ounce. Following the end of the Period the silver price gave up much of these gains falling 28.4% to US$34.70 per ounce on the 5(th) May.

The strength in the gold price is being driven by a number of factors. The dollar has continued to weaken with the dollar index losing 7.5% over the Period. Further dollar weakness is anticipated following the S&P downgrade of its outlook on US government debt to negative from stable during April. Political instability in Libya and other parts of North Africa and the Middle East will, in the view of many commentators, continue to drive the gold price as will the further economic uncertainty within the Eurozone where Portugal has been the latest country requiring a bail-out. Against this back-drop where gold is sought for its safe haven status, investment demand for gold in China as a hedge against inflation continues to grow at an increasing rate and could well become a dominant driver of the metal's price going forward.

While gold continues to breach new highs, many gold equities and junior gold equities in particular have witnessed a lacklustre performance, suffering from the nervousness and volatility of equity markets. The Manager therefore believes that a dislocation in value has occurred with the valuations of many gold companies not reflecting the increased cash flows and operating margins that the higher gold price will generate. While the Manager anticipates that this volatility will continue over the short term with generally weak equity markets, over the longer term, equities are expected to perform strongly, closing this disconnect.

The outlook for other commodities remains generally positive with continued demand for raw materials from China and other developing economies. Junior resource companies will continue to benefit from this demand. However, with the nuclear crisis in Japan being far from resolved, the outlook for the uranium sector remains uncertain over the medium term. The Manager, anticipating that there will be delays in the approval of new reactors and a resulting slowing of future demand, significantly reduced the Company's exposure to uranium during March and exited a junior uranium focused holding completely.

Elsewhere in the sector, and particularly in the major and mid-cap miners, merger and acquisition activity continues apace and will continue to support higher valuations across the sector. Fronteer Gold, which itself completed the acquisition of AuEx Ventures in November, was acquired by Newmont for C$2.3 billion. In a move out of the gold sector, other gold major, Barrick, offered C$7.3 billion for copper producer Equinox which itself completed the acquisition of copper developer Citadel for A$1.25 billion in January.

Investment Allocation

At 28 April 2011, the Company's assets were allocated in the following approximate proportions:

 
 Asset Allocation by Commodity         Asset Allocation by Geography 
 Gold (& Silver)              61.3%    Africa                  46.5% 
 Bulk Minerals                8.5%     Europe                  9.7% 
 Base Metals                  10.1%    North America           7.5% 
 Energy Minerals              9.2%     South America           10.5% 
 Platinum Group Metals        4.1%     Central Asia & Russia   3.7% 
 Diamonds                     0.0%     South East Asia         5.7% 
 Other                        0.0%     Australasia             8.3% 
 Cash                         6.9%     Other (ETFs)            1.2% 
                                       Cash                    6.9% 
 Asset Allocation by Development 
  Stage 
 Production                   39.3% 
 Development                  36.4% 
 Exploration                  16.2% 
 ETF                          1.2% 
 Cash                         6.9%

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

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