TIDMAPF
RNS Number : 0245Q
Anglo Pacific Group PLC
25 October 2021
News Release
25 October 2021
Anglo Pacific Group PLC
Q3 2021 Trading Update - Record quarterly portfolio
contribution
Anglo Pacific Group PLC ("Anglo Pacific", the "Company" or the
"Group") (LSE: APF, TSX: APY), issues the following trading update
for the period 1 July to 25 October 2021. Unless otherwise stated,
all unaudited financial information is for the quarter ended 30
September 2021.
Highlights
Q3 2021 Q2 2021 9M 2021 9M 2020
$m QoQ% $m $m YoY% $m
Kestrel 11.70 139% 4.90 21.47 19% 18.12
Voisey's Bay 6.81 119% 3.12 9.93 - -
Narrabri 0.52 34% 0.39 1.67 (45%) 3.05
Mantos Blancos 1.57 11% 1.41 4.32 83% 2.36
Maracás Menchen 0.90 8% 0.83 2.33 (0.13)
Four Mile 0.10 (1%) 0.10 0.21 (37%) 0.33
Royalty and stream income 21.60 10.75 39.93 23.73
Dividends - LIORC & Flowstream 1.80 (9%) 1.98 4.67 6% 4.40
Interest - McClean Lake 0.61 (2%) 0.62 1.84 10% 1.67
Royalty and stream related revenue 24.01 80% 13.35 46.43 56% 29.80
EVBC* 0.74 (25%) 0.99 2.33 8% 2.17
Principal repayment - McClean Lake 0.51 - 0.51 2% 0.50
Less:
Metal streams cost of sales (1.65) 116% (0.77) (2.42) - -
Total portfolio contribution 23.61 74% 13.57 46.85 44% 32.47
* Following the application of IFRS 9, the royalties received
from EVBC are reflected in the fair value movement of the
underlying royalty rather than recorded as royalty income.
-- Portfolio contribution of $23.6m in Q3 2021 - the highest
individual quarter in the Company's history
-- Portfolio contribution in the quarter was 180% higher than Q3
20 and also ahead of that generated in the first six months of
2021
-- Results benefitted from very high coking coal prices being
captured at Kestrel during the third quarter, resulting in revenue
of $11.7m
-- Current coking coal spot prices are US$390/t, significantly
ahead of the average for Q3 21, suggesting an even stronger quarter
to come in Q4
-- Cobalt prices were also higher during the third quarter,
resulting in a net contribution of $5.2m from Voisey's Bay - and
with spot prices in excess of US$27/lbs, the outlook for the
remainder of the year looks promising
-- Solid performance from the Group's Maracás Menchen, Mantos
Blancos and EVBC royalties in the third quarter - with possible
volume upside to come in the final quarter
-- Further well documented production and quality issues at
Narrabri, impacting revenue in the third quarter
-- Strength of portfolio contribution generated in Q3 21
resulted in the Group's leverage ratio dropping below 2x at the end
of the third quarter
Julian Treger, Chief Executive Officer of the Company,
commented:
"We are delighted to announce a record quarter of portfolio
contribution from our royalty and streaming assets.
Having lagged the broader commodity basket, coking coal prices
began to rebound significantly at the beginning of the third
quarter, averaging around $210/t for the period in which our Q3
royalty was payable. Prices have continued to increase since and
are now at $390/t which suggests that the fourth quarter could
provide a very strong finish to the year for the Group.
Elsewhere, we were pleased with the performance from Voisey's
Bay, which has also benefitted from a higher cobalt price
environment than what we anticipated for H2 21 at the time of the
acquisition. Overall cobalt prices have increased by 13% since we
acquired the stream.
The portfolio contribution from the third quarter has enabled
the Group to meaningfully de-lever during the fourth quarter, with
our leverage ratio now under 2x. The Group has $36m available under
its existing credit facility and $9m of shares held in treasury,
along with our remaining stake in LIORC valued at $30m providing
$75m in financing flexibility, not including the $13m to be
received in instalments over the next 18 months following the sale
of the Narrabri royalty.
Following the recent announcement of the sale of our thermal
coal royalty, we continue to pursue our strategy of increasing our
exposure to commodities that support a more sustainable world and
expect the contribution from coking coal related assets to reduce
to 8% of Group's total portfolio contribution by 2025. To this end
we are actively evaluating opportunities and are confident in our
pipeline and ability to further diversify the business. We remain
positive going into Q4 with the strong commodity fundamentals seen
recently, looking broadly sustainable as well as strong volume
performance expected from the portfolio."
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.
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) 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. 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 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'. 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, steams 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.
Forward-looking statements are not guarantees of future
performance and involve risks, uncertainties and assumptions, which
could cause actual results to differ materially from those
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. No statement in this communication is intended to be, nor
should it be construed as, a profit forecast or a profit
estimate.
By its nature, this information is subject to inherent risks and
uncertainties that may be general or specific and which give rise
to the possibility that expectations, forecasts, predictions,
projections or conclusions will not prove to be accurate; that
assumptions may not be correct and that objectives, strategic goals
and priorities will not be achieved.
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, steams 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. Readers are cautioned that the list of
factors noted in the section herein entitled 'Risk' is not
exhaustive of the factors that may affect the Group's
forward-looking statements. Readers are also cautioned to consider
these and other factors, uncertainties and potential events
carefully and not to put undue reliance on forward-looking
statements.
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.
The Group's management relies upon this forward-looking
information in its estimates, projections, plans and analysis.
Although the forward-looking statements contained in this
announcement are based upon what the Group believes are reasonable
assumptions, there can be no assurance that actual results will be
consistent with these forward-looking statements. 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.
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