TIDMAPF
RNS Number : 6751G
Anglo Pacific Group PLC
28 July 2021
News Release
28 July 2021
Anglo Pacific Group PLC
Half Year 2021 Trading Update
Anglo Pacific Group PLC ("Anglo Pacific", the "Company" or the
"Group") (LSE: APF, TSX: APY), is pleased to issue the following
trading update. Unless otherwise stated, all unaudited financial
information is for the quarter or half year ended 30 June 2021.
This update is ahead of the release of the full Group audited
half year results on 25 August 2021.
Highlights
-- Portfolio contribution(1) for Q2 2021 of GBP9.4m, a 38.2%
increase compared to GBP6.8m in Q1 2021, includes maiden deliveries
under the Voisey's Bay stream following completion of the
acquisition at the end of Q1 2021. The Group's Q2 2021 portfolio
contribution has benefitted from 5 deliveries from the stream, and
when combined with the 3 deliveries thus far in July 2021, the
Group has realised total proceeds of US$4.0m (GBP2.8m)
-- Portfolio contribution of GBP16.2m in H1 2021 compared to
GBP19.1m in H1 2020, reflects lower coking coal prices and volumes
at both Kestrel and Narrabri, primarily in Q1 2021, but is offset
by maiden contributions from the Group's Voisey's Bay stream of
GBP1.7m
-- Coal prices in the earlier part of 2021 were impacted by the
Chinese import ban on Australian coal - this position reversed in
late Q2 2021, resulting in a more favourable outlook for H2
2021
-- Dividends from LIORC of C$2.75 per share declared in H1 2021
compared to C$0.80 per share in H1 2020 - benefitting from
continued strong iron ore pricing throughout the first six months
of 2021
-- Realised copper and vanadium prices were higher in the period
which benefitted Mantos Blancos and Maracás Menchen revenue (the
latter was impacted by a one-off off-take adjustment charge in H1
2020)
-- All the Group's producing assets are back in operation,
following the recommencement of activities at the McClean Lake Mill
after a period of COVID-19 related care and maintenance (as
announced at the Group's Q1 2021 Trading Update)
-- Net debt of GBP78.7m at the end of June 2021 (GBP24.4m at the
beginning of the year) reflecting the acquisition of the Voisey's
Bay cobalt stream in Q1 2021
-- With US$29m of undrawn borrowings, US$39m residual position
in LIORC and US$8.0m of treasury shares, the Group has financing
flexibility of US$76m to finance further growth opportunities
Anglo Pacific expects H2 2021 to be stronger, in light of a
rally in cobalt prices and the full effect of the Voisey's Bay
stream being recognised in the Group's portfolio, strength in
copper and iron ore prices and a recovery in the coal market,
supported by the backdrop of strong infrastructure spending and
continued anticipated demand for 21(st) century commodities
Julian Treger, Chief Executive Officer of the Company,
commented:
"Anglo Pacific has had a stable first half of 2021, with 8
cobalt deliveries now processed under our Voisey's Bay stream which
has generated cash to the end of July 2021 of US$4.0m. Voisey's Bay
was a transformational acquisition during the period for Anglo, not
only in terms of it being the Group's largest and most significant
transaction to date, but also in terms of transitioning our
portfolio towards 21(st) century commodities that support a more
sustainable future. It is pleasing to see the stream operate
smoothly and in line with our expectations.
While prices for our commodities were weaker in Q1 2021, they
began to recover in Q2 2021.
In particular, cobalt prices are up 20% in the last month and
are higher than our Voisey's Bay investment case. In addition, both
copper and iron ore have increased by over 20% year to date and our
Mantos Blancos and LIORC revenues have benefitted from this.
It was also pleasing to see the coal markets turn during the
second quarter, with coking coal now more than $200/t (from a low
of $100/t) and thermal coal at $150/t, which should benefit our
revenue in H2 2021. Infrastructure spending should continue to
benefit iron ore, coking coal and copper whilst the longer-term
fundamentals for cobalt and vanadium remain positive due to
continued expected demand from electric vehicle and battery
manufacturers.
Spot prices continue to remain higher than consensus prices in
the near-term, and with our producing assets all in operation we
expect a stronger performance from our portfolio in the second half
of the year.
We look forward to updating the market in relation to our
investment activity at the half year, and we remain busy advancing
our pipeline in order to continue adding royalties and streams to
our portfolio."
For further information:
Anglo Pacific Group PLC +44 (0) 20 3435 7400
Julian Treger - Chief Executive Officer
Kevin Flynn - Chief Financial Officer
Website: www.anglopacificgroup.com
Berenberg +44 (0) 20 3207 7800
Matthew Armitt / Jennifer Wyllie / Varun
Talwar / Detlir Elezi
Peel Hunt LLP +44 (0) 20 7418 8900
Ross Allister / Alexander Allen / David
McKeown
RBC Capital Markets
Farid Dadashev / Marcus Jackson / Jamil
Miah +44 (0) 20 7653 4000
Camarco +44 (0) 20 3757 4997
Gordon Poole / Owen Roberts / James Crothers
Notes to Editors
About the Company
Anglo Pacific Group PLC is a global natural resources royalty
and streaming company. The Company's strategy is to become a
leading natural resources company through investing in high quality
projects in preferred jurisdictions with trusted counterparties,
underpinned by strong ESG principles. It is a continuing policy of
the Company to pay a substantial portion of these royalties and
streams to shareholders as dividends.
(1) Portfolio Contribution
Portfolio contribution represents funds received or receivable
from the Group's underlying royalty and stream related assets which
is taken into account by the Board when determining dividend
levels.
Portfolio contribution is royalty and stream related revenue net
of stream inventory purchase costs, plus royalties received or
receivable from royalty financial instruments carried at FVTPL and
principal repayments received under the Denison financing
agreement.
Cautionary statement on forward-looking statements and related
information
Certain statements in this announcement, other than statements
of historical fact, are forward-looking statements based on certain
assumptions and reflect the Group's expectations and views of
future events. Forward-looking statements (which include the phrase
'forward-looking information' within the meaning of Canadian
securities legislation) include statements that are predictive in
nature, depend upon or refer to future events or conditions, or
include words such as 'expects', 'anticipates', 'plans',
'believes', 'estimates', 'seeks', 'intends', 'targets', 'projects',
'forecasts', or negative versions thereof and other similar
expressions, or future or conditional verbs such as 'may', 'will',
'should', 'would' and 'could'. These statements may include,
without limitation, statements regarding the operations, business,
financial condition, expected financial results, cash flow,
requirement for and terms of additional financing, performance,
prospects, opportunities, priorities, targets, goals, objectives,
strategies, growth and outlook of the Group including the outlook
for the markets and economies in which the Group operates, costs
and timing of acquiring new royalties and making new investments,
mineral reserve and resources estimates, estimates of future
production, production costs and revenue, future demand for and
prices of precious and base metals and other commodities, for the
current fiscal year and subsequent periods.
Forward-looking statements are based upon certain material
factors that were applied in drawing a conclusion or making a
forecast or projection, including assumptions and analyses made by
the Group in light of its experience and perception of historical
trends, current conditions and expected future developments, as
well as other factors that are believed to be appropriate in the
circumstances. The material factors and assumptions upon which such
forward-looking statements are based include: the stability of the
global economy; the stability of local governments and legislative
background; the relative stability of interest rates; the equity
and debt markets continuing to provide access to capital; the
continuing of ongoing operations of the properties underlying the
Group's portfolio of royalties, streams and investments by the
owners or operators of such properties in a manner consistent with
past practice; no material adverse impact on the underlying
operations of the Group's portfolio of royalties, streams and
investments from a global pandemic; the accuracy of public
statements and disclosures (including feasibility studies,
estimates of reserve, resource, production, grades, mine life and
cash cost) made by the owners or operators of such underlying
properties; the accuracy of the information provided to the Group
by the owners and operators of such underlying properties; no
material adverse change in the price of the commodities produced
from the properties underlying the Group's portfolio of royalties,
streams and investments; no material adverse change in foreign
exchange exposure; no adverse development in respect of any
significant property in which the Group holds a royalty or other
interest, including but not limited to unusual or unexpected
geological formations and natural disasters; successful completion
of new development projects; planned expansions or additional
projects being within the timelines anticipated and at anticipated
production levels; and maintenance of mining title.
A variety of material factors, many of which are beyond the
Group's control, affect the operations, performance and results of
the Group, its businesses and investments, and could cause actual
results to differ materially from those suggested by any
forward-looking information. Such risks and uncertainties include,
but are not limited to current global financial conditions,
royalty, stream and investment portfolio and associated risk,
adverse development risk, financial viability and operational
effectiveness of owners and operators of the relevant properties
underlying the Group's portfolio of royalties, streams and
investments, royalties, streams and investments subject to other
rights, and contractual terms not being honoured, together with
those risks identified in the 'Principal Risks and Uncertainties'
section of our most recent Annual Report, which is available on our
website. If any such risks actually occur, they could materially
adversely affect the Group's business, financial condition or
results of operations.
Forward-looking statements are provided for the purposes of
assisting readers in understanding the Group's financial position
and results of operations as at and for the periods ended on
certain dates, and of presenting information about management's
current expectations and plans relating to the future. Readers are
cautioned that such forward-looking statements may not be
appropriate other than for purposes outlined in this announcement.
Forward-looking statements are not guarantees of future performance
and involve risks, uncertainties and assumptions, that may be
general or specific which could cause actual results to differ
materially from those forecast, anticipated, estimated or intended
in the forward-looking statements. Past performance is no guide to
future performance and persons needing advice should consult an
independent financial adviser. The forward-looking statements made
in this announcement relate only to events or information as of the
date on which the statements are made and, except as specifically
required by applicable laws, listing rules and other regulations,
the Group undertakes no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise, after the date on which the statements
are made or to reflect the occurrence of unanticipated events. No
statement in this communication is intended to be, nor should it be
construed as, a profit forecast or a profit estimate.
This announcement also contains forward-looking information
contained and derived from publicly available information regarding
properties and mining operations owned by third parties. This
announcement contains information and statements relating to the
Kestrel mine that are based on certain estimates and forecasts that
have been provided to the Group by Kestrel Coal Pty Ltd ("KCPL"),
the accuracy of which KCPL does not warrant and on which readers
may not rely.
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