TIDMAPF
RNS Number : 0663P
Anglo Pacific Group PLC
14 October 2021
News Release
14 October 2021
Anglo Pacific Group PLC
Divestment of Narrabri thermal coal royalty for consideration of
up to $36 million
Anglo Pacific Group PLC ("Anglo Pacific" the "Company" or the
"Group") (LSE: APF, TSX: APY) is pleased to announce its exit from
thermal coal by entering into an agreement to sell its 1% gross
revenue royalty over the Narrabri mine to the operator, Whitehaven
Coal Limited ("Whitehaven") for consideration of up to $36
million.
The consideration is structured as fixed payments totalling
$21.6 million, along with contingent payments which could generate
a further $ 14 million. The transaction is expected to close on 31
December 2021, with no material conditions precedent to closing.
Anglo Pacific will continue to receive royalties from Narrabri
until the end of the current calendar year.
This transaction significantly improves the Group's carbon
footprint with a remaining portfolio of assets now increasingly
weighted towards cobalt, vanadium, copper and nickel - commodities
which will be essential to decarbonise energy generation in the
years ahead.
Highlights
-- $21.6 million fixed consideration, to be received in
instalments until 31 December 2026, of which $13 million will be
received within 18 months of the transaction close date
-- Contingent consideration of a further estimated $14 million
depending on future coal price levels, Narrabri sales volumes and
the successful permitting of the Narrabri South extension
-- H2 2021 Narrabri royalty income estimated at $1 - 2 million
to be paid to Anglo Pacific, a period which is seeing elevated
thermal coal prices
-- Increases Anglo Pacific's portfolio contribution from 21(st)
century commodities that support a more sustainable world
-- Provides Anglo Pacific with the opportunity to redeploy capital into further acquisitions
Anglo Pacific CEO, Julian Treger, commented:
"I am delighted to announce that we have entered into an
agreement to sell the Narrabri thermal coal royalty, which is
aligned with our strategy and represents a further step in focusing
on the investment in 21(st) century commodities supporting a more
sustainable world.
This transaction is consistent with our stated strategy of
moving away from carbon-based energy exposure, as demonstrated by
our investments in copper, nickel, vanadium, uranium and most
recently the transformational $205 million Voisey's Bay cobalt
stream acquired earlier this year.
Whitehaven was selected as the preferred bidder following a
competitive sales process, on the basis of an offer which we
considered to provide maximum value to Anglo Pacific shareholders.
We intend to deploy the proceeds from this transaction into further
acquisitions, including to partially fund the upcoming $20 million
Incoa calcium carbonate financing which is likely to occur in H1
2022."
The Transaction
Anglo Pacific has entered into an agreement to sell its Narrabri
thermal coal royalty to a subsidiary of Whitehaven. The transaction
is expected to close on 31 December 2021 with no material
conditions precedent to closing , and the Group will continue to be
entitled to receive H2 2021 Narrabri royalty income, estimated at
$1 - 2 million.
Anglo Pacific will receive $21.6 million in fixed payments, of
which $13 million is due within 18 months of the transaction close
date. The remainder will be received in annual instalments until
the end of 2026.
Contingent payments totalling $5 million, payable in
instalments, will become receivable upon the approval of the
Narrabri South extension project by state and federal authorities
in Australia, prior to 31 December 2026.
In addition, Anglo Pacific is entitled to receive bi-annual
contingent payments linked to future realised Narrabri coal prices
ranging from $0.05/t if realised prices exceed $90/t to $0.25/t if
realised coal prices exceed $150/t up to the end of calendar year
2026. Assuming Narrabri ROM production of 4.3-5.0 million tonnes
for fiscal year 2022 and 7.0-8.5 million tonnes per annum in the
southern panels, the Company would be entitled to receive
approximately $9 million in price linked contingent payments, were
realised Narrabri coal prices to be in excess of $150/t.
History
Anglo Pacific acquired the Narrabri royalty for $65 million in
March 2015. As at 31 December 2021, the Narrabri royalty is
expected to have a carrying value of approximately $45 million
based on amortised cost. Since its acquisition, Anglo Pacific has
received approximately $32 million in royalty income, with a
further $1 - 2 million expected before year-end 2021.
For further information:
Anglo Pacific Group PLC +44 (0) 20 3435 7400
Julian Treger - Chief Executive Officer
Kevin Flynn - Chief Financial Officer
Marc Bishop Lafleche - Chief Investment
Officer
Website: www.anglopacificgroup.com
Berenberg +44 (0) 20 3207 7800
Matthew Armitt / Jennifer Wyllie / Varun
Talwar / Detlir Elezi
Peel Hunt LLP +44 (0) 20 7418 8900
Ross Allister / Alexander Allen / David
McKeown
RBC Capital Markets
Farid Dadashev / Marcus Jackson / Jamil
Miah +44 (0) 20 7653 4000
Camarco +44 (0) 20 3757 4997
Gordon Poole / Owen Roberts / Charlotte
Hollinshead
Notes to Editors
About Anglo Pacific
Anglo Pacific Group PLC is a global natural resources royalty
and streaming company. The Company's strategy is to become a
leading natural resources company through investing in high quality
projects in preferred jurisdictions with trusted counterparties,
underpinned by strong ESG principles. It is a continuing policy of
the Company to pay a substantial portion of these royalties and
streams to shareholders as dividends.
Unless otherwise stated, all figures quoted are in US$
denomination.
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