By Alex MacDonald
LONDON--Mining royalty investment firm Anglo Pacific Group PLC
(APF.LN) warned its 2014 royalty income would be significantly
lower than the previous year due to the price slump in the global
commodities market and production setbacks at the Rio Tinto PLC
(RIO) operated Kestrel coal mine in Queensland, Australia.
The London and Toronto-listed firm said in a trading update it
expects its gross royalty income to be in the region of GBP3.2
million ($4.9 million) to GBP3.6 million for 2014. This compares
with GBP14.7 million in royalty income the previous year. Anglo
Pacific is scheduled to report its full-year results this
quarter.
Anglo Pacific said it faced challenging commodity-market
conditions during 2014 even as the number of its producing mine
royalties increased to five from three over the year.
It said its royalty from the Kestrel mine was hit by
lower-than-expected coal output stemming from unexpected
maintenance carried out in the fourth quarter of last year and
slower-than-expected ramp-up of production at the mine.
Anglo Pacific said it expects the proportion of Kestrel's coal
output from Anglo Pacific's royalty lands to rise over the next
three years. Chief Executive Julian Treger also said there were an
"increasing number of prospective royalty acquisition opportunities
in the Anglo Pacific pipeline."
The royalty firm also said it generated GBP8.7 million from
disposals and has GBP8.8 million in cash as of the end of the
year.
-Write to Alex MacDonald at alex.macdonald@wsj.com
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