A global natural resources royalty company.

Anglo Pacific’s strategy is to expand its royalty portfolio in order to increase royalty related income, to diversify its portfolio and ensure that it will be able to replace revenues from its current royalty properties as they reach the end of their mine lives. This will be achieved through both direct acquisition of primary and secondary royalties and investment in projects at the development and production stage. It is a continuing policy of Anglo Pacific to pay a substantial proportion of these royalty revenues to shareholders as dividends.

Anglo Pacific is mainly focused on producing or near-term producing long-life assets in established natural resources jurisdictions.

The Group’s directors and management have both corporate finance and real-world mining experience and take an active approach to each royalty investment to achieve better returns at reduced risk.

The Group’s Strategic Objectives

1

Aim

To develop as a leading international diversified royalty company with a portfolio centred on income producing base metals and bulk materials royalties and streams.

2

Strategy

Achieving our aim through acquisition of both primary and secondary royalties together with metal streams.

3

Criteria

Achieving strategy through acquisitions which satisfy these criteria ·

  • Established natural resources jurisdictions
  • Long-life assets
  • High-quality and low-cost assets
  • Near-term producing assets
  • Production and exploration upside potential
  • Strong operational management teams
  • Diversification of royalty portfolio

4

Goal

Executing the strategy will result in additional cash producing royalties and streams, a substantial proportion of whose cash flows will be paid to shareholders as dividends.

ESTABLISHED NATURAL RESOURCES JURISDICTIONS

The Group continues to review potential business opportunities globally and in order to manage its risk profile, the Group intends to focus predominantly on mines in established, relatively low-risk mining jurisdictions, primarily those in North America, South America, Europe and Australia. As at December 31, 2015, 92.5% of the Group’s existing assets were based in such jurisdictions.

LONG-LIFE ASSETS

Long mine life assets can provide long-term revenue, which in turn can contribute to ensuring that acquisitions to replace depleted royalties and maintain cash flow are not required on a regular basis. Three of the royalties in the Group’s existing portfolio are over mines that have reserves of 20 years or more.

HIGH-QUALITY AND LOW-COST ASSETS

The Group is also focused on ensuring that new royalties are over high-quality and low-cost operations. This helps ensure longevity of cash flows by reducing the risk of mining operations ceasing to be economically viable. Within its existing portfolio, the Group has exposure to low cash cost assets in the Kestrel and Narrabri mines. Both Kestrel and Narrabri operate in the lowest quartile on the cost curve in comparison to similar mines.

NEAR-TERM PRODUCING ASSETS

The Group is seeking to grow its royalty income beyond the existing organic growth profile of its current royalty portfolio by investing in producing or near-term producing assets.

PRODUCTION AND EXPLORATION UPSIDE POTENTIAL

The Group seeks to acquire royalties and streams where it may benefit from improvements made to the scale of mining operations. Any increases in production can result in higher royalty payments, without requiring the Group to contribute to the cost of expanding or optimising the operation. Royalties can also benefit from exploration successes that lead to enlarged economic reserves. Increased reserves can extend a mine’s life or facilitate an expansion of the existing operations, potentially providing higher revenue over a longer period.

STRONG OPERATIONAL MANAGEMENT TEAMS

Strong operational management teams are integral to delivering a successful project and to optimising the value of a mine and, therefore, a royalty or stream. The Group’s current royalty portfolio includes mines operated by highly experienced management teams.

DIVERSIFICATION OF ROYALTY PORTFOLIO

The Group is seeking to build a diversified portfolio of royalties across a variety of different commodities and geographic locations to reduce dependency on its cornerstone royalty, Kestrel.
The Group’s target portfolio would result in an increased exposure across various base metals and bulk materials. The Group may also selectively pursue royalties in energy commodities, such as uranium and oil and gas, as well as other commodities, such as platinum group metals and precious stones.