TIDMAPF
RNS Number : 4062M
Anglo Pacific Group PLC
16 September 2019
News Release
16 September 2019
Anglo Pacific Group PLC
Shareholding in Labrador Iron Ore Royalty Corp increased to
5.88%
Anglo Pacific Group PLC ("Anglo Pacific", the "Company" the
"Group") (LSE: APF, TSX: APY) is pleased to announce that it has
increased its total investment in Labrador Iron Ore Royalty
Corporation ("LIORC") by a further US$7.1 million (C$9.8
million,GBP5.8 million) since the announcement of the Group's 2019
interim results on 22 August 2019. To date in 2019 the Company has
invested a total of US$20.0 million (C$26.7 million, GBP15.8
million) in LIORC.
The Group has acquired a further 1 million shares since the
beginning of 2019, and when added to our investment during 2018
results in a 5.88% interest in LIORC at a total cost of US$70.0
million (C$92.8 million, GBP54.7 million). At the close of trading
on Friday 13 September the Group's investment in LIORC had a market
value of US$76.3 million (C$101.9 million, GBP60.3 million)
LIORC has a policy of paying quarterly dividends and on 12
September 2019 announced cash dividends for the third quarter of
2019 of C$1.00 per common share, comprised of a regular dividend of
C$0.25 and a special dividend of C$0.75. Anglo Pacific's total
investment will qualify for this dividend which will be additive to
the Company's third quarter income. Since the initial acquisition
in August 2018 the Group has received dividends of C$8.9 million
(GBP5.2 million) from LIORC.
LIORC is listed on the Toronto stock exchange (TSX:LIF) and has
a market capitalisation of approximately C$1.7 billion and is
essentially a pass through vehicle of the income it derives from
the Labrador Iron Ore mine in Canada operated by Rio Tinto.
Anglo Pacific continues to view this investment as an attractive
addition to its portfolio, with revenue from LIORC continuing to
outperform the Company's expectations. LIORC provides exposure to
the premium end of the iron ore concentrate and high margin pellet
markets, on terms which are immediately accretive. LIORC mainly
receives revenue from its 7% GRR over the Labrador Iron Ore mine.
It also receives dividends from its minority equity interest in the
mine.
The additional investment was funded with cash on-hand and a
partial draw down on the Company's revolving credit facility and
follows the 1.525% Net Smelter Return royalty acquisition over all
copper produced at the Mantos Blancos copper mine announced at the
end of last month. The Group retains access to US$35 million under
its current revolving credit facility.
Commenting on the investment, Julian Treger, Chief Executive
Officer of Anglo Pacific Group, said:
"The global sell off in the equity markets at the beginning of
Q3 2019 provided an attractive entry point for Anglo Pacific to
opportunistically add to its LIORC position as we considered that
the underlying fundamentals of the royalty and iron ore product
fitted within our return requirements at such price levels. In this
respect, we have made what we believe to be conservative
assumptions about the iron ore and pellet prices going forward. The
acquisition is immediately cash generative and will be accretive to
our earnings in FY 2019 and beyond.
We will continue to opportunistically add to our position
depending on the share price and our own liquidity, in the meantime
we will allocate our cash towards shareholder returns, repaying our
borrowings and making other royalty acquisitions to continue the
considerable progress we have made in diversifying our sources of
income."
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
Berenberg +44 (0) 20 3207 7800
Matthew Armitt / Detlir Elezi
BMO Capital Markets Limited +44 (0) 20 7664 8020
Jeffrey Couch / Tom Rider / Neil Elliot
Peel Hunt LLP +44 (0) 20 7418 8900
Ross Allister / James Bavister / David McKeown
Camarco +44 (0) 20 3757 4997
Gordon Poole / Owen Roberts / James Crothers
About the Company
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
and streams 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 projects. It is a continuing policy of the Company
to pay a substantial portion of these royalty and stream revenues
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) are provided for the purposes of assisting
the reader in understanding the Group's financial position and
results of operations as at and for the periods ended on certain
dates, and to present information about management's current
expectations and plans relating to the future. Readers are
cautioned that such forward-looking statements may not be
appropriate for other purposes than outlined in this announcement.
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 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 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'. 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; 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 and
investments in a manner consistent with past practice; 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 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.
Forward-looking statements are not guarantees of future
performance and involve risks, uncertainties and assumptions, which
could cause actual results to differ materially from those
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. No statement in this communication is intended to be, nor
should it be construed as, a profit forecast or a profit estimate.
By its nature, this information is subject to inherent risks and
uncertainties that may be general or specific and which give rise
to the possibility that expectations, forecasts, predictions,
projections or conclusions will not prove to be accurate; that
assumptions may not be correct and that objectives, strategic goals
and priorities will not be achieved. 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,
royalties and investments, and could cause actual results to differ
materially from those suggested any forward-looking information.
Such risks and uncertainties include, but are not limited to
current global financial conditions, 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 and investments,
royalties 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. Readers are
cautioned that the list of factors noticed in the 'Principal Risks
and Uncertainties' section of our most recent Annual Report is not
exhaustive of the factors that may affect the Group's
forward-looking statements. Readers are also cautioned to consider
these and other factors, uncertainties and potential events
carefully and not to put undue reliance on forward-looking
statements.
This announcement also contains forward-looking information
contained and derived from publicly available information regarding
properties and mining operations owned by third parties. The
Group's management relies upon this forward-looking information in
its estimates, projections, plans, and analysis. Although the
forward-looking statements contained in this announcement are based
upon what the Group believes are reasonable assumptions, there can
be no assurance that actual results will be consistent with these
forward-looking statements. 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.
Third party information
As a royalty and streaming company, 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
and investments, 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
and investments, 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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