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 January 1, 2016 to May 23, 2016. Unless otherwise stated, all unaudited financial information is for the quarter ended March 31, 2016.
- Royalty income of £1.9m in Q1 2016 (Q1 2015: £2.3m, Q4 2015: £3.0m) in line with the Group’s expectations that the majority of royalty income, similar to 2015, will be received in H2 2016
- Guidance from Kestrel remains unchanged with 30-35% of production expected within the Group’s land in H1 2016 and 85-90% in H2 2016
- Recovery in both the outlook and price of coking coal and vanadium pentoxide
- First receipts from the Four Mile royalty of £0.2m
- Cash and cash equivalents of £3.7m as at March 31, 2016 (December 31, 2015: £5.7m)
- Borrowings of £9.3m as at March 31, 2016 (December 31, 2015: £7.3m)
- Following positive developments at Berkeley Energia Limited (“Berkeley”), the Group’s equity stake is valued at £10.3m (as of May 23, 2016) and the implied value of the Group’s royalty, based on Berkeley’s recently announced deal, is approximately $10m higher than the value carried on our balance sheet
Julian Treger, Chief Executive Officer of the Company, commented:
“Similar to 2015, we expect the majority of our royalty income to be earned in the second half of 2016. We continue to expect royalty income for 2016 as a whole to be significantly higher than the £8.7m earned in 2015, a year which marked the beginning of a turnaround for the Group in terms of production returning to the Group’s royalty land at Kestrel and a full year of income for the Narrabri royalty.
We are pleased to finally see the price of coking coal show some signs of recovery. We believe that the price risk relating to coking coal should be to the upside.
We were encouraged to see the first receipts from our Four Mile uranium royalty in the period. Uranium is a commodity we continue to believe in and are pleased to see the recent positive developments at Berkeley which not only has increased the value of our equity holding but also implies that the market value of our royalty is approximately $10m higher than the carrying value in our balance sheet based on an identical royalty which they announced earlier this month.”
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