TIDMAPF
RNS Number : 8852K
Anglo Pacific Group PLC
27 April 2020
News Release
27 April 2020
Anglo Pacific Group PLC
Q1 2020 Trading Update and 7.7% increase in quarterly interim
dividend
Anglo Pacific Group PLC ("Anglo Pacific", the "Company" or the
"Group") (LSE: APF, TSX: APY), issues the following trading update
for the period 1 January 2020 to 24 April 2020. Unless otherwise
stated, all unaudited financial information is for the quarter
ended 31 March 2020.
Highlights
Q1 2020 Q4 201 9 Q1 2019
GBPm QoQ % GBPm GBPm
------------------------------------ ------- ------- -------- --------
Kestrel 8.4 24% 6.8 11.8
------------------------------------- ------- ------- -------- --------
Narrabri 0.8 33% 0.6 1.4
------------------------------------- ------- ------- -------- --------
M antos Blancos 0.6 (14%) 0.7 -
------------------------------------- ------- ------- -------- --------
Maracás Menchen 0.5 - 0.5 1.1
------------------------------------- ------- ------- -------- --------
Four Mile 0.1 - 0.1 -
------------------------------------- ------- ------- -------- --------
Royalty income 10.4 20% 8.7 14.3
------------------------------------- ------- ------- -------- --------
LIORC dividends 0.9 (64%) 2.5 1.7
------------------------------------- ------- ------- -------- --------
I nterest - McClean Lake 0.4 (20%) 0.5 0.5
------------------------------------- ------- ------- -------- --------
Royalty related revenue 11.7 - 11.7 16.5
------------------------------------- ------- ------- -------- --------
EVBC 0.5 (17%) 0.6 0.6
------------------------------------- ------- ------- -------- --------
Principal repayment - McClean Lake 0.4 (20%) 0.5 0.4
------------------------------------- ------- ------- -------- --------
Total portfolio contribution 12.6 (2%) 12.8 17.5
------------------------------------- ------- ------- -------- --------
-- Minimal impact of COVID-19 on the Group's royalties thus far
with Q1 2020 portfolio contribution of GBP12.6m in line with Q4
2019
-- Commodity prices which determine the Group's revenue in Q1
2020 were largely ahead of prices during Q4 2019 but far lower than
Q1 2019
-- Kestrel revenue in Q1 2020 benefitted from higher coking coal
prices and a weaker Australian dollar, in turn increasing the
weighted average royalty rate, with volumes largely in line with Q4
2019
-- Year-on-year portfolio contribution down 28% mainly due to
lower prices (noticeably Kestrel down by 28%) and lower dividends
from LIORC
-- LIORC revenue received by the Company, which is derived from
the passthrough of royalties and equity dividends received by LIORC
from Iron Ore Company of Canada ("IOC"), decreased in the period.
IOC did not declare an equity dividend in the first quarter of
2020, in part due to higher levels of expected IOC sustaining and
growth capital expenditure in 2020. This is also consistent with
prior years when IOC equity dividend payments have been weighted to
the third and fourth quarters. LIORC has reaffirmed previous Rio
Tinto full year 2020 saleable production guidance of 17.9 - 20.4mt
which compares favourably to 17.1mt in 2019.
-- The completion of a longwall changeout in January 2020
resulted in increased volumes from Narrabri during Q1 2020 compared
to Q4 2019, despite the now resolved weighting event which lead to
20 days of lost production
-- The Group is pleased with the level of production from
Maracás Menchen in Q1 2020, noting this will trigger the final
deferred payment in line with our expectations
-- Income from McClean Lake was in line with comparable
quarters; however, we would expect this to be lower in Q2 2020 due
to the operation being placed on care and maintenance as a result
of COVID-19
-- 7.7% increase in the quarterly interim dividend level to
1.75p per share (previously 1.625p per share) in light of the
limited disruption to material operations caused by COVID-19 thus
far and the satisfactory level of income generated during the first
quarter
-- Along with the 4.125p 2019 final dividend recommended, this
would provide shareholders with 5.875p of income between now and 14
August 2020
The proposed dividend timetable sets out the upcoming dividends,
as shown below
Payment date 18-Jun-20 14-Aug-20
----------- ----------
Record date 05-Jun-20 03-Jul-20
----------- ----------
Ex-div date 04-Jun-20 02-Jul-20
----------- ----------
Amount 4.125p* 1.75p
----------- ----------
*subject to shareholder approval at the 2020 AGM
Julian Treger, Chief Executive Officer of the Company,
commented:
"We are pleased to report resilient royalty revenue for Q1 2020,
in-line with that of the immediately preceding quarter. This is
largely due to the underlying operations from which we derive most
of our revenue experiencing limited COVID-19 related disruption
to-date. Overall, we saw a higher pricing environment during the
first quarter of 2020 compared to Q4 2019, but we are still some
way off the pricing levels seen twelve months ago.
The two noticeable variances in the quarter were the increase in
Kestrel revenue compared to Q4 2019 due to underlying pricing, and
the decrease in the dividends receivable from LIORC due to planned
capital expenditure in the year ahead.
We have seen two instances of COVID-19 related disruption to the
underlying mining operations from which our revenue is derived:
EVBC was placed on care and maintenance for a two week period in
March although we now understand this has ended; and Cigar Lake,
which provides the throughput at the McClean Lake Mill was also
placed on care and maintenance for an initial four week period from
23 March. We now understand that Cigar Lake will remain on care and
maintenance for an indeterminate period. Overall, this is not
material in the context of the Group's results and even if this
were to last for 3 months would only represent roughly 2.5% of 2019
portfolio contribution.
We are encouraged thus far by the way in which the Australian
authorities have managed the threat posed by COVID-19 and it would
appear, at this stage, that there should be minimal disruption to
the mining sector as a result.
We have increased the quarterly interim dividend level from
1.625p per share to 1.75p per share. This increase is intended to
reduce what has become a large weighting to the final dividend and
is not an indication that there will be an increase in the overall
dividend for 2020. The final dividend for 2020 will be assessed in
Q1 2021 based on the outcome for the year.
We remain in a strong position, with a product which we believe
will be increasingly attractive to a capital constrained sector and
maintain liquidity in excess of US$75m to allow us to respond
rapidly should the right opportunities arise.
In the meantime, our business continues as normal having
provided all of our employees with the resources to work remotely
as we support the UK Government's "stay at home" measures. We
continue to generate and appraise investment opportunities. All of
our employees are being paid in full and we are also ensuring none
of our suppliers are out of pocket during this period of
lockdown."
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 / Jennifer Wyllie / Detlir
Elezi
Peel Hunt LLP +44 (0) 20 7418 8900
Ross Allister / Alexander Allen / David
McKeown
RBC Capital Markets
Farid Dadashev / Marcus Jackson / Jamil
Miah +44 (0) 20 7653 4000
Camarco +44 (0) 20 3757 4997
Gordon Poole / Owen Roberts / James
Crothers
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 become a
leading natural resources company through investing in high quality
projects in preferred jurisdictions with trusted counterparties,
underpinned by strong ESG principles. 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 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
readers in understanding the Group's financial position and results
of operations as at and for the periods ended on certain dates, and
of presenting information about management's current expectations
and plans relating to the future. Readers are cautioned that such
forward-looking statements may not be appropriate other than for
purposes 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 acquiring new royalties and 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; the
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, streams and investments by the owners or operators of
such properties in a manner consistent with past practice; no
material adverse impact on the underlying operations of the Group's
portfolio of royalties, steams and investments from a global
pandemic; 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 or
operators of such underlying properties; the 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, streams and investments; no
material adverse change in foreign exchange exposure; no adverse
development in respect of any significant 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 and investments, and could cause actual
results to differ materially from those suggested by any
forward-looking information. Such risks and uncertainties include,
but are not limited to current global financial conditions,
royalty, stream and 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, streams and
investments; royalties, steams 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 noted in the section herein entitled 'Risk' 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. This
announcement contains information and statements relating to the
Kestrel mine 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 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.
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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