TIDMAPF
RNS Number : 4871G
Anglo Pacific Group PLC
24 July 2019
News Release
24 July 2019
Anglo Pacific Group PLC
Half Year 2019 Trading Update
Anglo Pacific Group PLC ("Anglo Pacific", the "Company" or the
"Group") (LSE: APF, TSX: APY), the London and Toronto listed
royalty company, 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 2019.
This update is ahead of the release of the full Group audited
half year results on 22 August 2019.
Highlights
-- 60% year on year increase in portfolio contribution for the
six months ended 30 June 2019, to GBP33-33.5m (H1 2018:
GBP20.8m)
-- Record six months of income from Kestrel due to substantial
volume increases and resilient pricing levels
-- GBP3.2m earned from the Group's LIORC investment due to the
ongoing strength of the iron ore and iron ore pellet market, which
now represents the Group's second largest source of revenue
-- Strong recovery in production at Narrabri during H1 2019,
although higher than normal stock levels at the end of Q2 2019
impacted royalty receipts in the period
-- Whilst production volumes were in line with H1 2018 the
revenue from Maracás Menchen was impacted by the decline in
vanadium prices from the record levels seen in H2 2018, although
prices remain well above our price assumptions at the time of
acquisition
-- Borrowings repaid in full during H1 2019 with cash of
GBP14.5m at the end of June 2019
-- Including the Company's undrawn borrowing facility, the Group
has liquidity of GBP86.5m ($108m) available to finance its growth
ambitions
-- Currency had a favourable impact on the Group's results in
the period, with the GBP:USD and AUD:USD both showing favourable
movements, offset slightly when translating the Group's Australian
income into British pounds at the reporting date
-- Outlook for the remainder of the year remains positive, with
several royalties expected to benefit from volume increases and
pricing for premium bulk commodities is expected to remain
resilient in the short-term
Julian Treger, Chief Executive Officer of the Company,
commented:
"We are pleased to once again announce another significant
increase in our income for the first half of 2019. This is largely
attributable to the production increases achieved at Kestrel as the
new owners move towards their target of increasing production by
40% in 2019. In addition, the prices realised for premium, lower
polluting bulk commodities enjoyed another strong quarter and the
outlook remains positive.
We are particularly pleased with our latest acquisition, the
LIORC investment, which earned revenue of GBP3.2m in H1 2019 from a
combination of a strong iron ore price environment, resilient 65%
iron ore concentrate and iron ore pellet premiums along with the
distribution of previously retained cash by the company. The total
income from the LIORC investment over the past twelve months of
GBP5.2m represents a 13% payback on our investment and a very
healthy running yield.
Elsewhere in the portfolio, we were pleased to see Whitehaven
Coal report a strong half year in terms of production at Narrabri.
Volumes were in line with 2018 levels at Maracás, and although the
vanadium price fell from record highs seen in H2 2018 to more
normal levels during H1 2019, the prices are well above our
assumptions at the time of acquisition.
We continue to see strong demand for our royalty and streaming
financial products and are working hard towards making further
additions to our portfolio. Capital remains scarce for mining
operators which is presenting new opportunities for the Group. With
over $100m of liquidity available, we are well placed to finance
further acquisitions."
For further information:
Anglo Pacific Group PLC +44 (0) 20 3435 7400
Julian Treger - Chief Executive Officer
Kevin Flynn - Chief Financial Officer and Company Secretary
Website: www.anglopacificgroup.com
Berenberg +44 (0) 20 3207 7800
Matthew Armitt / Detlir Elezi
BMO Capital Markets Limited +44 (0) 20 7664 8020
Jeffrey Couch / Tom Rider / Neil Elliot
Peel Hunt LLP +44 (0) 20 7418 8900
Ross Allister / James Bavister / David McKeown
Camarco +44 (0) 20 3757 4997
Gordon Poole / Owen Roberts / James Crothers
Notes to Editors
About Anglo Pacific
Anglo Pacific Group PLC is a global natural resources royalty
company. The Company's strategy is to develop a leading
international diversified royalty company with a portfolio centred
on base metals and bulk materials, focusing on accelerating income
growth mainly through acquiring royalties on projects that are
currently cash flow generating or are expected to be within the
next 24 months, as well as investment in earlier stage royalties.
It is a continuing policy of the Company to pay a substantial
portion of these royalties 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
the reader in understanding the Group's financial position and
results of operations as at and for the periods ended on certain
dates, and to present information about management's current
expectations and plans relating to the future. Readers are
cautioned that such forward-looking statements may not be
appropriate for other purposes than 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 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; 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 and
investments in a manner consistent with past practice; 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 and operators of such
underlying properties; 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
and investments; no material adverse change in foreign exchange
exposure; no adverse development in respect of any 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,
royalties and investments, and could cause actual results to differ
materially from those
suggested any forward-looking information. Such risks and
uncertainties include, but are not limited to current global
financial conditions, 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 and investments,
royalties 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 noticed in the 'Principal Risks
and Uncertainties' section of our most recent Annual Report 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. 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.
Third party information
As a royalty and streaming company, the Group often has limited,
if any, access to non-public scientific and technical information
in respect of the properties underlying its portfolio of royalties
and investments, or such information is subject to confidentiality
provisions. As such, in preparing this announcement, the Group has
largely relied upon the public disclosures of the owners and
operators of the properties underlying its portfolio of royalties
and investments, as available at the date of this announcement.
This announcement contains information and statement 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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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