TIDMAPF
RNS Number : 7012X
Anglo Pacific Group PLC
06 May 2021
News Release
6 May 2021
Anglo Pacific Group PLC
Q1 2021 Trading Update
Anglo Pacific Group PLC ("Anglo Pacific", the "Company" or the
"Group") (LSE: APF, TSX: APY), is pleased to provide the following
trading update for the period 1 January 2021 to 5 May 2021. Unless
otherwise stated, all unaudited financial information is for the
quarter ended 31 March 2021.
As previously announced, the Group completed the
transformational U$205m acquisition of a cobalt stream from the
Voisey's Bay mine during Q1 2021, the Group's largest and most
significant transaction, pivoting the business from its coal
heritage towards 21st century commodities that support a more
sustainable future.
The Group's total portfolio contribution reduced to GBP6.8m for
Q1 2021, in large part reflecting the impact of the previously
announced disposal of 75% of its holding in LIORC to partially
finance the Voisey's Bay acquisition. Revenue from the stream has
commenced in Q2 2021.
Highlights
Q1 2021 Q4 2020 Q1 2020
GBPm QoQ % GBPm GBPm
------------------------------------ ------- ------- ------- --------
Kestrel 3.4 (10.5%) 3.8 8.3
------------------------------------- ------- ------- ------- --------
Narrabri 0.6 - 0.6 0.6
------------------------------------- ------- ------- ------- --------
M antos Blancos 1.0 - 1.0 0.6
------------------------------------- ------- ------- ------- --------
Maracás Menchen 0.4 (33.3%) 0.6 0.5
------------------------------------- ------- ------- ------- --------
Four Mile - (100%) 0.2 0.1
------------------------------------- ------- ------- ------- --------
Royalty income 5.4 (12.9%) 6.2 10.1
------------------------------------- ------- ------- ------- --------
LIORC dividends 0.6 (83.8%) 3.7 0.9
------------------------------------- ------- ------- ------- --------
I nterest - McClean Lake 0.4 - 0.4 0.4
------------------------------------- ------- ------- ------- --------
Royalty related revenue 6.4 (37.9%) 10.3 11.4
------------------------------------- ------- ------- ------- --------
EVBC 0.4 (33.3%) 0.6 0.5
------------------------------------- ------- ------- ------- --------
Principal repayment - McClean Lake - (100%) 0.3 0.4
------------------------------------- ------- ------- ------- --------
Total portfolio contribution 6.8 (39.3%) 11.2 12.3
------------------------------------- ------- ------- ------- --------
-- All of the Group's producing assets are now back in
operation, following the recommencement of activities at the
McClean Lake Mill after a period of COVID-19 related care and
maintenance
-- The pricing discount at Kestrel has narrowed in the first
quarter, although coking coal markets remain subdued
-- Lower volumes at Narrabri were offset by higher pricing
during the quarter, which was 13% higher than Q4 2020
-- Strong performance from Mantos Blancos, with volumes 15%
higher and pricing 40% higher than Q1 2020
-- Higher vanadium prices slightly offset the lower sales
volumes at Maracás Menchen following planned maintenance at the
kiln during Q1 2021 - margins also benefitted from the sales of
higher purity vanadium pentoxide for battery technology
customers
-- Q1 2021 dividend of C$1.00 per share declared by LIORC,
payable on 26 April 2021 and considerably higher than the C$0.25 in
Q1 2020 as less capex is expected to be required in 2021
-- The Group has received its first deliveries under the cobalt
stream from Voisey's Bay and will record its first sales in Q2
2021
-- The Group remains in a strong financial position to pursue
growth opportunities with liquidity of US70m available, subject to
lender consent
-- As previously announced and subject to shareholder approval
at the 2021 AGM, the board is recommending a final dividend for
2020 of 3.75p, payable on 18 August 2021 to shareholders who are on
the register of members at the close of business on 9 July 2021
Julian Treger, Chief Executive Officer of the Company,
commented:
"The first quarter of 2021 has started satisfactorily for Anglo
Pacific with the completion of the transformational acquisition of
the Voisey's Bay cobalt stream and the resumption of activity at
McClean Lake returning the Group's portfolio of producing assets to
full operation.
Despite volumes across the portfolio being lower in Q1 2021,
royalty income was only 13% lower than Q4 2020 following a recovery
in the commodity prices underlying the Group's producing assets.
Copper has been a standout performer in the year to date, with
strong supply demand fundamentals set to underpin prices in the
near to medium term. We have also seen gains in the vanadium price
which, along with a higher portion of vanadium sales to the battery
market, should result in increased revenue from our Maracás Menchen
royalty.
We are pleased to report the receipt of the first deliveries of
cobalt from our recent acquisition and the smooth integration of
the stream into our existing business. We look forward to updating
the market in due course as the stream begins to contribute to the
Group's revenues from Q2 2021.
The strength of the iron ore price has led to our remaining
stake in LIORC being worth US$35m. Along with US$27m available
under the existing credit facility and US$9m of shares held in
treasury, the Group has US$70m of financing flexibility. We
continue to assess opportunities to further diversify the portfolio
and we look forward to the remainder of 2021 with cautious optimism
for our portfolio and for commodities in general."
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 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) 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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