TIDMAPF
RNS Number : 9870V
Anglo Pacific Group PLC
09 November 2017
November 9, 2017
Anglo Pacific Group PLC
Q3 2017 Trading Update
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014 (as amended)
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
July 1, 2017 to November 9, 2017. Unless otherwise stated, all
unaudited financial information is for the quarter ended September
30, 2017.
Highlights
-- Total free cash flow generated of GBP14.6m in Q3 2017 (Q3
2016: GBP4.7m), an increase of 211%
-- Total contribution of GBP9.5m in Q3 2017 (Q3 2016: GBP4.7m)
comprising:
- Royalty income of GBP8.9m in Q3 2017 (Q3 2016: GBP4.7m), an
increase of 89%
- Denison financing receipts of GBP0.6m in Q3 2017
-- Increase in royalty income from Q3 2016 mainly due to a 39%
increase in average coal price achieved at Kestrel and a 46%
increase at Narrabri
-- Record production at Maracás Menchen in Q3 2017 which, when
combined with a 110% increase in the average vanadium price
achieved, resulted in royalty income increasing to GBP0.6m (Q3
2016: GBP0.2m), an increase of 200%
-- A return to net cash of GBP6.2m as at September 30, 2017
compared to net debt of GBP0.6m as at June 30, 2017
-- Net cash and free cash flow benefited from the commencement
of monthly royalty receipts, previously quarterly, from Kestrel
following changes to the Queensland royalty regime in Q3 2017,
resulting in a one-off benefit to reported cash in 2017
-- Completion of the US$2.0m acquisition of a 1% GRR over the
Piauí Nickel-Cobalt project which is operated by Brazilian Nickel
Limited
-- The previously announced 2017 interim dividend of 3.00p to be
paid in November 2017
-- A further interim dividend of 1.50p in relation to Q3 2017,
in line with previous guidance, is declared and will be payable in
February 2018
Trading Update
The Group is pleased to report continued strength in the
performance of its royalty and investment portfolio in Q3 2017.
This has resulted in a doubling of the total contribution and a
tripling of free cash flow generated, although the latter has
benefitted from certain one off items outlined below.
The total contribution from the Group's portfolio was GBP9.5m
for the quarter, compared to GBP4.7m in Q3 2016. The combination of
higher coal and vanadium prices has resulted in an 89% increase in
royalty income. The average coal price achieved by Kestrel and
Narrabi in the quarter increased by 39% and 46% respectively
compared to that of Q3 2016. In addition to the 110% increase in
the average vanadium price, the record operational performance at
Maracás Menchen resulted in its royalty income increasing to
GBP0.6m for the quarter from GBP0.2m in Q3 2016.
We are encouraged by the growth in sales volumes at both Kestrel
and Narrabri during the quarter and expect this to continue in Q4
2017. Importantly we continue to expect production from Kestrel to
remain largely within our private royalty lands for the rest of the
year and throughout 2018.
Total free cash flow generated in the period of GBP14.6m
compared with GBP4.7m in Q3 2016, which enabled the Group to repay
all of its borrowings. With the Kestrel royalty now being remitted
monthly the Group had cash and cash equivalents at September 30,
2017 of GBP6.2m. We expect to remain debt free, absent any
acquisitions, despite the additional dividend payment in 2017 and
the first deferred consideration payment in relation to Maracás
Menchen becoming due. The Group's revolving credit facility of
US$30m remains undrawn and fully available.
In line with the Group's recently announced dividend payment
timetable, the Group's interim dividend of 3.00p for the year ended
December 31, 2017 will be paid on November 15, 2017 and the
quarterly dividend for Q3 2017 of 1.50p will be paid on February
15, 2018. As previously stated, the Board will announce the
proposed final dividend for the year in the Q4 2017 trading update
in February 2018. We will consider the level of the final dividend
based on the 2017 full year results, the outlook for commodity
prices in 2018 and future investment opportunities for the
Group.
Julian Treger, Chief Executive Officer of the Company,
commented:
"Our portfolio has had another strong performance this quarter,
generating free cash flows of GBP14.6m. This has enabled us to fund
the US$2.0m acquisition of the Brazilian Nickel royalty and repay
our borrowings in full, and end the quarter in a net cash position
of GBP6.2m.
With continued increases in sales volumes at Kestrel, Narrabri
and Maracás Menchen, we expect another strong performance from our
portfolio in Q4 2017."
For further information:
Anglo Pacific Group PLC
Julian Treger - Chief Executive
Officer
Kevin Flynn - Chief Financial +44 (0) 20 3435
Officer and Company Secretary 7400
Website: www.anglopacificgroup.com
+44 (0) 20 7664
BMO Capital Markets Limited 8020
Jeffrey Couch/Neil Haycock/Tom
Rider
Macquarie Capital (Europe) Limited
Raj Khatri/Nicholas Harland/Ariel +44 (0) 20 3037
Tepperman 2000
+44 (0) 20 7418
Peel Hunt LLP 8900
Ross Allister/Chris Burrows
+44 (0) 20 7382
Redleaf Communications 4769
Charlie Geller/Elisabeth Cowell/Fiona
Norman
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 develop a
leading international diversified royalty and streaming company
with a portfolio centred on base metals and bulk materials,
focusing on accelerating income growth through acquiring royalties
on projects that are in the main 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 and streams
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 available
on www.sedar.com and 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.
Rio Tinto Limited, Whitehaven Coal Limited, Berkeley Energia
Limited and Atrum Coal NL are all listed on the Australian Stock
Exchange and report in accordance with the JORC Code. Orvana
Minerals Corporation, Largo Resources Limited and Denison Mines Inc
are listed on the Toronto Stock Exchange and report in accordance
with NI 43-101. Zamin is an independent mining group. Brazilian
Nickel Limited is a private developmental mining company.
Hummingbird Resources PLC is listed on AIM.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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