Anglo Pacific Group PLC (“Anglo Pacific” or the “Company”) (LSE: APF, TSX: APY), the London and Toronto listed royalty company is pleased to provide an update on its Narrabri royalty. This follows an announcement by the operator of the Narrabri Mine, Whitehaven Coal Limited (“Whitehaven”) (ASX: WHC), on December 10, 2015.
Whitehaven announced that the New South Wales Government’s Department of Planning and Environment has granted approval to increase annual production from 8 Mtpa to 11 Mtpa and to install a 400 metre wide longwall face at the Narrabri Mine. The 400 metre wide longwall face is expected to initially increase run of mine (“ROM”) coal production by an estimated 750 Ktpa. The first 400 metre wide longwall panel is expected to come into production in the first half of calendar year 2017.
At full production, Narrabri’s FOB costs are expected to be reduced by ~A$3/t. Narrabri’s FY 2015 unit cost was A$52/t, well below the current thermal coal market price.
Anglo Pacific acquired the 1% gross revenue royalty on March 11, 2015 and is entitled to royalty income over 100% of sales from the Narrabri Mine from January 1, 2015.
Julian Treger, Chief Executive Officer of Anglo Pacific, commented:
“We are pleased that Whitehaven has received the approval to extend longwall panel width and increase annual ROM production by almost 40%. These initiatives should lead to significantly higher production volumes from 2017 onwards, exceeding our expectations at the time of the royalty acquisition. We are also encouraged by the unit cost reductions expected at the Narrabri Mine.
This action by Whitehaven suggests confidence in increased demand for Narrabri’s high quality cleaner coal product in the future.”
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