Tether Purchases Significant Share in Element Altus Royalties
Tether Investments, the investment subsidiary of the world’s leading issuer of stablecoins, acquired a 31.9% stake in Canadian gold mining company Element Altus Royalties. The purchase involved the acquisition of 78.4 million shares from La Mancha Investments in a private deal completed on June 10.
The transaction is a strategic real-world expansion move to solidify the backing of Tether’s gold-backed cryptocurrency, XAUT (Tether Gold), and increase exposure to low-risk, physical assets.
Strategic Real-World Expansion Through Gold Royalties
Elemental Altus Royalties follows a model of royalties and streaming that allows investors to obtain exposure to gold production without mining risks. Tether noted that the model aligns with its low-risk investment thesis for consolidating the ecosystem behind its stablecoins.
“This model aligns with Tether’s strategic, low-risk preference for real-world asset exposure,” the company described via press release.
Option Agreement Boosts Future Investment Flexibility
Apart from the initial investment, Tether entered an option agreement with AlphaStream Limited and Alpha 1 SPV Limited, a private Abu Dhabi Global Market-registered entity. The option allows Tether to purchase an additional 34.4 million shares after October 29, subject to Elemental’s agreement for redemption prior to maturity.
AlphaStream and Alpha 1 SPV are private Abu Dhabi Global Market-registered entities, reflecting the global reach of Tether’s growing asset portfolio.
Strengthening the XAUT Ecosystem and Digital Commodities and furthering financial inclusion and investment in emerging industries
Tether CEO Paolo Ardoino emphasized that the move forms a broader plan to support Tether’s tokens by hard assets like gold and Bitcoin.
“By accessing a diversified portfolio of gold royalties via Elemental, we are strengthening the backing of our ecosystem while driving forward Tether Gold and future commodity-backed digital assets,” Ardoino said.
Tether has over 100,000 BTC and 80 tons of physical gold in reserve, securing the value and validity of its tokens.
Tether Sees Broader Effect on Virtual and Physical Commodities
In addition to its Element investment, Tether recently announced that it would open-source its Bitcoin Mining Operating System. The new operating system enables businesses to run their mining independently without the use of third-party mining software.
This move, complemented by its gold and Bitcoin-backed reserves, further solidifies Tether as a pioneer in merging legacy asset classes with blockchain.
