TIDMAPF
RNS Number : 7918V
Anglo Pacific Group PLC
26 July 2018
News Release
26 July 2018
Anglo Pacific Group PLC
Q2 2018 and Half Year 2018 Trading Update
Anglo Pacific Group PLC ("Anglo Pacific", the "Company" or the
"Group") (LSE: APF, TSX: APY), the London and Toronto listed
royalty company, issues the following trading update for the period
1 April to 25 July 2018. Unless otherwise stated, all unaudited
financial information is for the quarter or half year ended 30 June
2018.
This update is ahead of the release of the half year results on
23 August 2018.
Highlights
-- 65% quarter on quarter and 30% year on year increase in
royalty income for Q2 2018 in the range of GBP11.0m - GBP11.5m (Q1
2018: GBP6.7m, Q2 2017: GBP8.6m)
-- 10% year on year increase in royalty income for the six
months ended 30 June 2018, to GBP17.5m - GBP18.0m (H1 2017:
GBP16.1m)
-- Cash received from Denison/McLean Lake of GBP1.5m - GBP1.7m
in addition to the above royalty income for the six months ended 30
June 2018 (H1 2017: GBP1.5m)
-- 15% increase in total contribution(1) from royalty portfolio
for the six months ended 30 June 2018 to GBP20.5m - GBP21.0m (H1
2017: GBP17.6m)
-- 165% increase in royalties from the Maracás Menchen vanadium
mine, to a record GBP2.0m - GBP2.5m for H1 2018 (H1 2017: GBP0.8m)
and already in advance of that received for 2017 as a whole
-- Strong performance from Kestrel, with H1 2018 royalty income
in the range of GBP14.0m - GBP14.5m, up 15% on the same period in
2017 driven mainly by higher coal prices
-- Kestrel volumes more than doubled in Q2 2018 compared to Q1
2018, and we expect production to remain at these levels into H2
2018, setting the stage for a strong full year
-- Technical issues continue to persist at Narrabri, with H1
2018 royalty income down 25% on the same period in 2017 to between
GBP1.0m - GBP1.5m
-- Closing of the Candente royalty acquisition, which provides
longer term exposure to copper and has the potential to further
diversify the Group's exposure to Kestrel
(1) Total contribution includes royalty income, cashflows from
Denison/McLean Lake and other royalty financial instruments
accounted for in accordance with IFRS 9, for example El Valle
Boinás-Carlés
Julian Treger, Chief Executive Officer of the Company,
commented:
"It is pleasing to report another set of results in which our
revenue continues to grow. Although this is once again derived in
the main from Kestrel, it is very good to see that revenue from
Maracás Menchen is now contributing more than 10% of our income,
and revenue in H1 2018 from that royalty is already in advance of
that received for the whole of 2017.
We are now confident that 2018 will see further organic growth
in our income and cash generation. This is thanks to the continued
resilience of commodity prices, noticeably thermal coal and
vanadium, which are currently at recent five-year highs, and the
increasing premia for higher quality product, which our portfolio
provides exposure to.
Kestrel produced a strong operational result in Q2 2018, with
volumes more than double those in Q1 2018. This is particularly
encouraging in the lead up to the completion of its sale to EMR and
Adaro. We see this change of ownership as a positive event for
Anglo Pacific, with Adaro recently announcing that it intends to
double output over the coming years. Given that virtually all
mining is expected to be within our private royalty area over this
period, there is the potential to see a corresponding doubling of
our royalty income (depending on commodity prices), which would be
a significant and material windfall for the Company and its
stakeholders.
In the meantime, we have added a further royalty to our
portfolio, with the recently announced Candente transaction,
providing us with long-term exposure to a large copper
resource.
We are very pleased with the progress we have made in the first
half of 2018 and believe that we are well placed to report another
year of growth, along with making significant additions to our
royalty portfolio."
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014 (as amended)
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
BMO Capital Markets Limited +44 (0) 20 7664 8020
Jeffrey Couch / Tom Rider
Canaccord Genuity Limited +44 (0) 20 7523 8000
Martin Davison / James Asensio
Peel Hunt LLP +44 (0) 20 7418 8900
Ross Allister / James Bavister
Redleaf Communications +44 (0)20 3757 6880
Elisabeth Cowell / Ian Silvera / Fiona Norman
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 information contained in this announcement, including
any information as to future financial or operating performance and
other statements that express management's expectation or estimates
of future performance, constitute "forward looking statements". The
words "expects", "anticipates", "plans", "believes", "estimates",
"seeks", "intends", "targets", "projects", "forecasts", or negative
versions thereof and other similar expressions identify
forward-looking statements. Forward-looking statements are
necessarily based upon a number of estimates and assumptions that,
while considered reasonable by management, are inherently subject
to significant business, economic and competitive uncertainties and
contingencies. Further, forward-looking statements are not
guarantees of future performance and involve risks and
uncertainties which could cause actual results to differ materially
from those anticipated, estimated or intended in the
forward-looking statements. Furthermore, this announcement contains
information and statements 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 material assumptions and risks
relevant to the forward-looking statements in this announcement
include, but are not limited to: stability of the global economy;
stability of local government and legislative background;
continuing of ongoing operations at the properties underlying the
Group's portfolio of royalties in a manner consistent with past
practice; accuracy of public statements and disclosures (including
feasibility studies and 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. If any such
risks actually occur, they could materially adversely affect the
Group's business, financial condition or results of operations. For
additional information with respect to such risks and
uncertainties, please refer to the "Principal Risks and
Uncertainties" section of our most recent Annual Report on the
Group's website www.anglopacificgroup.com. Readers are cautioned to
consider these and other factors, uncertainties and potential
events carefully and not to put undue reliance on forward-looking
statements. The forward-looking statements contained in this
announcement are made as of the date of this announcement only and
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 holder, 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, 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, as available at the date of
this announcement.
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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