Anglo Pacific Group PLC Publication of Annual Report 2013 (6582D)
March 31 2014 - 12:24PM
UK Regulatory
TIDMAPF
RNS Number : 6582D
Anglo Pacific Group PLC
31 March 2014
March 31, 2014
Anglo Pacific Group PLC
Publication of Annual Report 2013
Anglo Pacific Group PLC ("Anglo Pacific", the "Company" or the
"Group") (LSE: APF, TSX: APY) announces the publication of its
Annual Report and Accounts for the year ended December 31, 2013
(the "Annual Report 2013") on the Company's website,
www.anglopacificgroup.com.
A hard copy version of the Annual Report 2013 will be sent to
those shareholders who have elected to continue to receive paper
communications in April 2014. Shareholders who have not elected to
continue to receive paper communications will be sent a
notification of the availability of this document on the Company's
website by post or, where they have elected, by email. The document
will also be available through the National Storage Mechanism at
www.hemscott.com/nsm.do and through SEDAR at www.sedar.com.
Appendix A to this announcement contains a description of the
principal risks and uncertainties affecting the Company and a
responsibility statement. This information should be read in
conjunction with the Company's preliminary results announcement
released on February 20, 2014, which included a condensed set of
the Company's financial statements and information on important
events that have occurred during the financial year and their
impact on the financial statements.
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
Liberum Capital +44 (0) 20 3100 2000
Chris Bowman / Ryan de Franck
BMO Capital Markets Limited +44 (0) 20 7664 8121
Jeffrey Couch / Neil Haycock / Tom Rider
Bell Pottinger +44 (0) 20 7861 3232
Nick Lambert / Lorna Cobbett
Notes to editors:
About Anglo Pacific
Anglo Pacific is a global mining royalty company. The Company's
vision is to create a leading international diversified royalty
company with a focus on base metals and bulk materials. The
Company's strategy is to build a diversified portfolio of
royalties, focusing on accelerating income growth through acquiring
royalties in cash or near-term cash producing assets. It is an
objective of the Company to pay a substantial portion of these
royalties to shareholders as dividends.
Appendix A
The information set out below, which is extracted from the
Annual Report 2013, together with the information contained in the
preliminary results announcement released on February 20, 2014,
constitutes the material required by the Disclosure and
Transparency Rules to be communicated to the media in full unedited
text through a Regulatory Information Service. This announcement is
not a substitute for reading the full Annual Report 2013. Cross
references in the text below refer to pages and sections in the
Annual Report 2013.
Principal risks and uncertainties
"Whilst limiting a number of the risks associated with
traditional mining and commodity investments, royalties remain
exposed to a number of risk factors. An optimised selection of
royalty investments within a balanced portfolio should nevertheless
help to mitigate these. Anglo Pacific also undertakes measures to
seek to further mitigate the key risks related to its strategy as
much as possible:
Risk description Mitigation
---------------------- ----------------------------------------------
Corporate
Overweight The Group's strategy is to diversify
exposure to more broadly within the base metals
coking coal, and bulk materials sector, increasing
a key input exposure to copper, zinc and other
in steel production, metals not directly linked to steel
increasing production, in line with our objective
dependence of specialising in the non-precious
on future metals sector
demand for
steel
Highly dependent The Group's current strategy is to
on a single accelerate the process of acquiring
cash-generative cash generative royalties to reduce
royalty the current reliance on Kestrel,
our principal cash-generative royalty.
Limited access Management is looking to improve
to information relationships with the operators
from the operators of the Group's existing royalties
and to try to obtain better information
rights for both existing and new
royalties.
Inability A renewed focus on acquiring income
to pay the generating royalties along with liquidity
dividend in its mining and exploration interests
should allow the Group to seek to
maintain and grow its dividend. In
addition, the Company has considerable
accumulated distributable reserves.
Retention The Group understands the importance
of key executives of and is committed to attracting,
retaining and incentivising key executives.
For more information on the Group's
remuneration policies, please refer
to the Directors' Remuneration Report
on pages 43 to 45.
Inability The Group has an experienced management
to acquire team with an extensive network of
royalties contacts and a strong track record
due to of investing in the mining industry.
pricing or The new management team bring with
competition them alternative avenues in exploring
for and creating new royalty opportunities.
The Group believes it can lead the
development of royalty financing
in the base metals and bulk materials
sector, given the predominant focus
of its peers on precious metals.
Inability The Group is cash generative and
to acquire has liquidity in its mining and exploration
new royalties portfolio. In addition, the potential
due to lack to access capital markets and the
of financing entering into by the Group of a twelve-month
unsecured revolving credit facility
provide additional resources to acquire
new royalties.
Royalty The Directors have significant experience
acquisitions of investing in the mining industry
may and have considerable expertise in
not produce assessing the forward demand for
anticipated commodities. The Group uses consensus
revenues or lower forecasts when valuing all
royalty investments, which reduces
the risk of underperformance and
a site visit is undertaken to assess
the viability of the underlying project.
Corporate
Dependence The Group has limited control over
on the operator the operation of the mine it has
to deliver invested in. The Group conducts detailed
a commercially due diligence on all investments,
efficient which will often include a site visit
mining operation. by suitably qualified personnel that
will highlight any economic, operational
or environmental concerns. Further,
newly created royalties can be tailored
to allow for performance milestones
to try to ensure that the operator
performs as intended.
Potential Newly created royalties can be tailored
misalignment to allow for performance milestones
of interests to try to ensure that the operator
between the performs as intended.
Group and
operators
Legal
Enforceability The Group seeks to invest in countries
of with well established legal jurisdictions
royalty rights which will provide a means of recourse
for breach of contract. In addition,
the Group will seek to register its
royalty interest where possible to
try to ensure the royalty survives
both bankruptcy and change of control.
Jurisdiction (i) The Group seeks to focus its
risk investments on those countries with
(i) Resource established legal jurisdictions,
nationalism low geopolitical risk and an established
mining industry. Having a diversified
portfolio has allowed the Group to
(ii) Labour de-risk small investments in operations
relations in developing countries.
(iii) Tax (ii) The Group does not operate the
mines which it invests in and bears
no liability for any adverse event
or disaster at site level.
(iii) As part of the due diligence
process the Group considers applicable
withholding taxes and any existing
state royalties. A material alteration
of a tax regime could impact the
economic viability of a project,
and ultimately royalty income. As
the royalty rate for the Kestrel
royalty is set by the state, a change
in the tax regime could have a direct
effect on royalty income. The Group's
assets are generally located in developed
economies which encourage mining
activity through a fair and consistent
tax system.
Financial
(including
financial
instruments)
Commodity The Group's strategy is to diversify
price away from its dependence on coking
coal through acquiring royalties
in the base metals and bulk materials
sector. The Group uses consensus
or lower forecasts when valuing all
royalty investments which reduce
the risk of overpayment. A fall in
commodity price is mitigated by virtue
of the relatively low fixed cost
base of the Group as it is not an
operator nor has it any hedging contracts
to fulfil.
Liquidity The Group seeks to ensure that it
can meet all of its obligations as
they fall due by preparing regular
cash flow projections, highlighting
any currency requirements well in
advance of settlement. The Group
has a strong balance sheet, an undrawn
US$15mtwelve-month revolving credit
facility and potential access to
the capital markets to provide additional
funding to meet its obligations as
well as its investment objectives.
Credit The Group operates controlled treasury
policies which spreads the concentration
of the Group's cash balances amongst
separate financial institutions with
high credit ratings. The Group's
credit risk on monies advanced to
explorers and operators is taken
into account when assessing the fair
value of these assets at each reporting
date. For receivables, the Group
presents these on the balance sheet
net of any amount for doubtful debt.
As these primarily relate to the
Kestrel royalty, the credit risk
is minimal due to the world class
nature of the operator.
Foreign exchange The Group's exposure to foreign currency
arises from different currencies
associated with income (mainly Australian
dollars), expenditure including dividend
(mainly in pounds sterling) and investment
(usually in US dollars). As there
are so few transactions, the risk
is managed by the Board using detailed
cash flow projections prepared regularly.
At present the Board has determined
that a hedging policy is unnecessary.
Interest rates The Group has limited exposure to
interest rate risk, and its twelve-month
revolving credit facility is unhedged.
Other pricing The value of the Group's royalties
is underpinned by commodity prices
which may affect the future expected
cash flows. This is taken into account
at each reporting date in assessing
for impairment. The Group has a portfolio
of junior mining equity investments
which fluctuate in value based on
the active quoted share price. The
reduction in value of the portfolio
over the last few years has resulted
in a full impairment of unrealised
losses such that any further pricing
risk should be much less material
to the Group."
Directors' responsibility statement
"Each of the Directors, whose names and functions are listed in
the management section of the Directors' Report confirm that, to
the best of each person's knowledge and belief:
-- the financial statements, prepared in accordance with
International Financial Reporting Standards ("IFRSs") as adopted by
the EU, give a true and fair view of the assets, liabilities,
financial position and profit of the Group and Company; and
-- the Directors' Report contained in the Annual Report includes
a fair review of the development and performance of the business
and the position of the Company and Group, together with a
description of the principal risks and uncertainties that they
face.
By order of the Board
B.M. Wides
Acting Chairman
March 31, 2014"
This information is provided by RNS
The company news service from the London Stock Exchange
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