Anglo Pacific Share Discussion Threads

[haydock] 02/10/2013 15:20

One for you Q.P.

[...]
Interesting historical note, we have fallen since.

Note even old E,Jackson has forgotten the CDN coal & he knew this company well back in 2006.
The item has gone now, did he know about the coal then ?

[bhoddhisattva] 02/10/2013 15:18

Que Passa ... forgive me asking but apart from seemingly gloating, what is your interest here?

Do you hold or are you short? Or neither and just curious?

[quepassa] 02/10/2013 12:24

If you're referring to me, I'd keep the curtains closed.

Share price down another 4 pence today or 2.2%.

Not gloating, just adding a bit of reality to what is going on.

Denial is a not a river in Africa.

ALL IMO. DYOR.

QP

[haydock] 02/10/2013 10:49

Answers to a few comments lately.

Royalty income for the first half of 2013 came in at £6.3 million, compared £6.9 million in the first half of last year, the company has elected to maintain its interim dividend of 4.45p.That, says John, is "an indication of our confidence in the outlook".



The company's finances are well in order, with £16.4 million in the treasury, and the expectation is that the stable operating profits achieved over the past six months will be a point from which considerable growth will be achieved.


All this forward looking article makes the poor negative comments in the I/c sell, look a little pase' to say the least.

[ned] 02/10/2013 10:36

Thanks for that haydock.

I had been driven into a deep depression by whatsisnames' endless thinly veiled gloating over the share price falls.

I may even open the curtains today !

ned

[haydock] 02/10/2013 10:03

Even they, Minesite: who back in 2004 wrote up the CDN coal story that made me first invest in APF:

Have now completely no record of any coal in Canada in the archive & never include it in the write ups !

[haydock] 02/10/2013 10:01

Minesite:

October 01, 2013

Anglo Pacific's Operating Profits Remain Remarkably Stable, Given The Difficult Conditions For Mining Companies

By Ryan Jackson


The income streams of most mining companies have been on the decline over the first half of 2013.


Coal stack at the Kestrel mine
Coal stack at the Kestrel mine

But Anglo Pacific's chief executive John Theobald reported in a recent conference call that the company's royalty stream has "held up pretty well in very difficult mining and commodity markets".



Royalty income for the first half of 2013 came in at £6.3 million, compared £6.9 million in the first half of last year, the company has elected to maintain its interim dividend of 4.45p.That, says John, is "an indication of our confidence in the outlook".



During the first half of the year, Anglo Pacific's operating profit fell slightly, from the £5.1 million delivered during the corresponding period last year to £4.8 million in the first half of 2013.



Despite the good operational performance however, the company reported an overall loss of £30 million, due to a £34 million impairment charge relating to equity investments.



"The impairment charge does not relate to any of our royalty assets", stresses chief financial officer Kevin Flynn. "It's an accounting charge of which £26.7 million had already been reflected in our balance sheet."



Total assets for the company were valued at the end of June at £304 million pounds, down from the £360 million reported for December 31, 2012.



Aside from the hit taken on the equity portfolio, the lower valuation is also due to fluctuations in the Australian dollar exchange rate and to a reduction in the value of the Kestrel royalty, down as a result of weaker coking coal prices.



During the first six months the company had to contend with a number of operational challenges in regards to the royalties it holds.



One of Anglo Pacific's royalty agreements is with Anglo American on the Amapa iron ore mine in Brazil.



"Amapa has been producing quite well but they reported a disruption to their port facility", said Kevin. This negatively impacted sales during the period.



Despite the interruption in shipping, mining continues at Amapa and stockpiled material will be sold when shipping capacity is re-established.



Meanwhile, at the El Valle and Carles project operated by Orvana Minerals, there was strong production but also an accident in the new shaft. That has forced Orvana to bring ore up through the decline until the shaft can be re-commissioned.



"I think this really indicates part of the benefits of being a royalty company", says John.



"We get effectively a percentage of the top line and while hauling ore up the decline will affect Orvana's cost per ounce, it won't materially affect our royalty payments."



Royalty income from Kestrel in Queensland fell during the period. But the project, operated by Rio Tinto Coal Australia and BM Alliance Coal Operations (a 50/50 joint venture between BHP Billiton and Mitsubishi), is about to benefit from the startup of a US$2 billion mining extension into the Kestral South portion of the property.



"This will see production peaking at around six million tonnes per annum with, according to Rio Tinto, a life of mine average of 5.7 million tonnes per annum", said John. "Anglo Pacific expects to reap the full benefits of this by 2016".



Currently coal makes up 63 per cent of the value in the royalty portfolio. But Kevin says the company has diversified over the period "with some gold, iron ore, uranium, and chromite". And John said he has high hopes for the future.



"We really are of the opinion that the mining markets are now at the bottom and there have been significant events at major companies and major improvements", he said.



"The major miners are now focusing on operational efficiency and excellence and I think that's going to bring a lot of confidence back to the mining sector which will then trickle down to the mid-tier and junior sector."



This is encouraging.



The company's finances are well in order, with £16.4 million in the treasury, and the expectation is that the stable operating profits achieved over the past six months will be a point from which considerable growth will be achieved.

[piedro] 19/9/2013 16:56

Hay hay,
I am presuming that the APF directors are not ½wits.
They have shared data with their Groundhog neighbours (according
to Atrum) so they should know what is going on and Atrum have been
blowing their trumpet whenever and wherever possible. They are
excellent at PR which has perhaps inflated the share price but APF should
have got the message.
Also, nowadays the market is beginning to appreciate the difference
between metallurgical and thermal coal.
When Atrum listed they put an Enterprise Value of $0.24/tonne on
their then 50MT JORC resource (now 1.57BT). This can be used for
some sort of idea to valuation of the Panorama and Discovery licences.
AIMO.

[haydock] 19/9/2013 15:19

No not a minnow I bought, on a far flung exchange.
I have sent money to Aus as well over the years, but did get some back in the end.
I should have said that the Antrim management did not know oil, & I wonder if this will be the problem for APF.
They are not miners, they are accountants & may miss value the CDN. coal.

[quepassa] 19/9/2013 15:02

Slight difference. Haydock has been on about Canadian coal for a long time.

So I am interested to learn if he backed his views. I hope he did and I hope he made a lot of money on Atrum.


And remain interested to hear Haydock's reply. I think that Ozzie coal is at a very difficult juncture. But I am very keen to hear about Maple Leaf coal which may be quite different and if he backed his conviction.


I don't do crystal ball investing. I do fundamental analysis and macro-analysis. Sorry, I have no crystal ball to lend. It's just bloody hard work that pays off and ultimately putting your money where your mouth is.

Maybe I am completely missing your point. It just doesn't seem like rocket-science that the share price of APF was going to be hit if coal was going down and the junior mining sector was severely under the cosh. It just seemed obvious to me that APF would fall in line with the rest of the junior natural resources sector.

ALL IMO. DYOR.

QP

[haydock] 19/9/2013 14:29

Exactly, if they have done well, then good on em.

I like good management & thought I had bought that & great prospects, when I went heavily head first into a CDN. managed company Antrim oil this last year.
I soon found I had made a very expensive mistake.

I have found a few successful tiddlers & had that kind of success, but I prefer to have RIT & APF as my back stops.

Now the point is of course what will APF make of their coal.It has been so long hidden on the balance sheet for nowt, that I,possibly we Piedro? fear that they will undervalue it.
They have made one move in that direction.

Like the APF management they are not real miners & that may be the problem.
If they could find a way to float it, but not on the TSX for gods sake?

[nielsc] 19/9/2013 14:19

QP,

"If not, shame you didn't switch horses and sell APF last year and back this one, given the big fall in APF and unbelievable 780% rise in Atrum."

Lend us that crystal ball you have once you have finished using it will you ;-)

Cheers,
Niels

[quepassa] 19/9/2013 13:45

Hope for you that you had a piece of this action. WOW!.

If not, shame you didn't switch horses and sell APF last year and back this one, given the big fall in APF and unbelievable 780% rise in Atrum. You'd be laughing if you had backed your own conviction and kept a more focused/targeted ongoing interest in Maple Leaf coal through Atrum than APF offers.

I take it that APF don't own any Atrum equity??

If you believe in Canadian coal - is APF really the best way to play it?

ALL IMO. DYOR.

QP

[haydock] 19/9/2013 13:09

One here for Q.P. that forgotten CDN. coal, why I hang on perhaps?
JUNIOR MINING

JUNIOR FOCUS: Atrum shoots the lights out on institutional buying

Shares have risen 780% since listing on the ASX last year, as Atrum has advanced Groundhog, the world's largest anthracite deposit.

Author: Alex Williams
Posted: Wednesday , 18 Sep 2013

LONDON (Mineweb) -

Shares in ASX-listed Atrum Coal have continued a price spike on heavy volume, rising 46% in ten trading days. Last week, the company prompted a price query from the Australian Stock Exchange, but shares have continued their upward move, jumping 19% since Monday.

"We're getting more reception from an institutional audience," co-founder Russell Moran tells Mineweb. He attributes widening interest in the company to its recent scoping study at its Groundhog project in British Columbia, its port access agreement in July and the market cap reaching a size that becomes investable for institutional buyers. "Those are the things that institutional grade investors need to see before they enter the stock," he says. "Those have been ticked recently."

Atrum has defied the poor performance of its ASX-listed coal mining peers since listing in July last year, rising 780% to a market cap of A$205m ($192m). Drilling at Groundhog has delineated the world's largest anthracite deposit by tonnage, the rarest and highest ranking coal, with resources of 1.57bn tonnes to date.

"We're just focused on getting into production on low cap-ex," Moran explains, outlining a strategy of incremental capital expansion that leads a market increasingly shy of fundraisings and project cost blow-outs. Groundhog's scoping study forecasts capital expenditure of $62m, initially producing 1.8m tonnes per annum at $85 per tonne. Anthracite prices are not benchmarked, but typically sit at $300 to $400 per tonne, generating margins that allow the company to truck its coal to port, rather than consider a more capital intensive upfront rail solution.

In July, Atrum announced a port access agreement at Port Stewart of 1.5m tonnes per annum, expanding by 5m tonnes per annum on construction of a new berth from 2016. Moran describes the agreement as a "huge milestone" for the company, with first exports scheduled for September 2014.

Canadian legislation permits bulk sampling of 100,000 tonnes per license before permitting is fully in place, such that exports can presage full scale production. "The idea is that we can generate cash flow whilst we're moving through the permitting path," he says, "which is very unique to Canada."

Based in Perth with a background in corporate finance, Moran contrasts the legislative environment to that of Australia, where he says it can take two years before a license is even transferred into the buyers name. "Canada's a beautiful place to operate."

Moran and Atrum's chairman, James Chisholm, have been the principle beneficiaries of Atrum's rise, owning 36% of the stock between them. As a matter of principle, they rule out equity issuance, opting instead for a non-dilutive blend of off-take funding and debt, which Moran expects to finalise "over the next three to four months." Updated coal reserves are meanwhile due before the end of the year, with a pre-feasibility study in the first quarter of 2014.

"We're blessed twofold," Moran concludes. "We inherited a very, very good deposit. It always helps when the geology stacks up and its located close to infrastructure, but the other side of the coin is that Canada's a fantastic jurisdiction. I like to think we're good managers, but a lot of things have gone our way."

[piedro] 19/9/2013 10:05

Columbus Gold shares surge on Nordgold deal
Nordgold snaps up majority option on Paul Isnard project in return for $30 million in expenditures.

Author: Kip Keen
Posted: Wednesday , 18 Sep 2013


Shares of junior-explorer Columbus Gold (TSX-V: CGT) caught fire Wednesday on news gold-producer Nordgold (LSE: NORD) optioned its Paul Isnard gold project in French Guiana. .... ....
hxxp://www.mineweb.com/mineweb/content/en/mineweb-exploration?oid=205502&sn=Detail

[nielsc] 19/9/2013 09:27

QP,

Easy to look back in retrospect. If I had know that 200p or less would have been on the cards then yes I would have sold and bought back.

To put it in context you made the same error on the run up to £3.70. I'm sure you sold out before £3. Likewise you missed buying at the bottom £1.60.

Perhaps you should take your own advice and take a position and make some money, after all you did call a lower price a year or so back. Maybe you just aren't confident enough on your take on APF.

Anyhow thanks for the advice, but I'll not use it. Afterall my investment strategy has worked very well over the last 2 decades.

Cheers,
Niels

[quepassa] 18/9/2013 12:26

Question please.

1. Multiply your shareholding by 370p.
2. Now multiply the shareholding by 200p.

Compare the fall in value of your shareholding over 18 months with the dividend you have received in this same time-frame.

But you still prefer to have kept the share.

This is the man VS Naipul is talking about.

ALL IMO. DYOR.

QP

[nielsc] 18/9/2013 12:10

QP,

I am sure you are well aware that APF has been paying a nice dividend that is somewhat better than your average savings account. So after 10 years in APF I have enjoyed a little more than mathematical excitement.

This share provides income and in the meantime there has been capital appreciation of the shares I hold.

Cheers,
Niels

[quepassa] 18/9/2013 11:32

I guess that's where we differ.

I fundamentally disagree - when it comes to investing- with the philosophy which dictates that you have " Got to take the rough with the smooth".

That's emotional investing.

After all, APF is for shareholders, like all other shares, nothing other than a piece of paper with a fluctuating price attached to it. It is surely better to get rid of that piece of paper at a high price and buy it back, if at all, at a low price, rather than hang on to it forever. Because that's all it is, a piece of paper.


An extract from a favourite piece of literature which I read every day:-

"....You must always know when to pull out. Remember that. Never become hypnotised by the beauty of numbers. A businessman isn't a mathematician. A businessman is someone who buys at ten and is happy to get out at twelve. The other kind of man buys at ten, sees it rise to eighteen and does nothing. He is waiting for it to get to twenty. The beauty of numbers. When it drops to ten again he waits for it to get back to eighteen. When it drops to two he waits for it to get back to ten. Well, it gets back there. But he has wasted a quarter of his life. And all he's got out of his money is a little mathematical excitement."

VS Naipul - A Bend in the River.


ALL IMO. DYOR.

QP

[nielsc] 18/9/2013 10:39

QP,

A balanced post. However I do agree with haydock regarding institutions holdings changing.

A case in point was DGO where institutional selling drove the price to almost £1, a level I bought heavily at. Within a year or two I had sold out my holding at between £4 and £5.

APF has had a rough time recently, but so has the commodity sector in general. Got to take the rough with the smooth. I am expecting gold to make a recovery over the next couple of years, which should help APF somewhat.

Cheers,
Niels

[haydock] 18/9/2013 09:27

Thoughtful points, but not a valid argument re L&G.

We know when inti's shovel it out they do so regardless for their own agenda.

APF at the moment is about the divi & a possible recovery.

I will agree though, that a company the owns small miners is not a happy ship, in the light of the list I posted.

Again though one can point to the recovery potential of these stocks, over time.

Personally I would have been happier if they had persisted more in the buying of the AUS royalty shares RCO, who were at that time collecting some royalties in gold.

[quepassa] 18/9/2013 09:15

I like commentating on and following this stock closely.
You learn so much by deeply analysing a handful of stocks which helps overall in one's investment activities.

I have held this stock many times in the past and cannot rule out that I will hold again but certainly not in the near future.

But not everybody follows your investment strategy. Each to his own. There are many different investment styles. Some, rather than preferring to "top up on the dips", do the opposite. For example....

On 13th. Sep, a RNS came out saying that L&G now own less than 3% of the voting rights of APF.

However barely six months ago, as at 20th. March 2013, Legal and General owned approx. 4.36 million shares/voting rights in APF being a stake of 3.98%.

How much they still own, who knows? Could be anything from zero to roughly 3 million shares/voting rights.

But L&G have divested a bare minimum of around one million shares/voting rights and maybe significantly more in less than six months.

Why would L&G sell? Why would others buy? That's the two-way traffic that makes the market. However, it is good for one's personal wealth not to be caught in the wrong lane of that traffic.

With a professional investor of the calibre of L&G selling and a move from 350p to 200p, one must ask oneself if that is just a "dip" or something more, if not a major shift in sentiment in the current adverse market for companies involved one way or another in the natural resources sector.

The recent £30m loss at APF is not to be ignored.

ALL IMO. DYOR.

QP

[nielsc] 18/9/2013 08:40

QP,

All depends if you are a long term holder or not.
Or long term commentator in your case ;-)

How many holders do you think bought at £3.50?
Not me for one. I prefer to top up on the dips.

Cheers,
Niels

[quepassa] 18/9/2013 08:13

That's distant history. APF have have historically done very well but....
You can't live in the past or rest on your laurels. The market is too cruel for that. It is the present which is judged.
The current story for the share price since early 2012 paints a different picture and has fallen from around 350p+ to c.200p.

ALL IMO. DYOR.

QP

[haydock] 17/9/2013 17:21

Chip has the brains, I have just learned to cut & paste !

I know it would make it an even better holding, on past records.