Anglo Pacific Share Discussion Threads

[stevenlondon3] 26/2/2014 11:20

There are not many companies where the senior management and strategy changes over night without warning or shareholder approval. I look forward to the AGM in April....the date has not yet been announced.

[haydock] 26/2/2014 09:45

HZM is a cash cow in the making,
All they need as they progress the permits is the Nickel price to move on the expected curve.
So far it looks to be as predicted.
sp. typical aim dog.

[haydock] 26/2/2014 09:42

Horizonte Minerals Closes In On Pre-Feasibility At Araguaia

24 Feb 2014
Exploration work at Araguaia
Exploration work at Araguaia

Horizonte Minerals recently published its financial results for 2013 and, as is only to be expected from a development company, these showed a large pre-tax loss for the year.

The company has yet to realize revenue from its Araguaia nickel project, south of the producing Carajas mineral district of Brazil.

Nonetheless, it has made considerable progress in de-risking the project over the past 12 months.

In 2013 the Horizonte team completed 9,309 metres of drilling in 321 holes as part of the final Phase 3 drilling program at Araguaia.

The program was completed on time and on budget and returned numerous high grade intercepts including 20.21 metres grading 2.29% nickel.

The data collected in from Phase 3 drilling is currently being incorporated into a prefeasibility study with the aim of converting sufficient resources to the indicated category to provide a minimum of a 20 year mine life at Araguaia.

Horizonte's last resource statement was published back in 2011 and delineated an indicated resource of 39.3 million tonnes grading 1.39% nickel and 0.061% cobalt as well as an inferred resource of 60.9 million tonnes grading 1.22% nickel and 0.058% cobalt, at a 0.95% nickel cut-off.

Though reserves have yet to be established at Araguaia, Horizonte says we won't have to wait long since the prefeasibility study is now in the home stretch and expected by the end of this quarter.

In addition to the drilling, a great deal of metallurgical test work was conducted in 2013 which confirmed that the Araguaia ore is amenable to processing by the planned rotary kiln electric furnace to produce ferro-nickel for sale.

The company raised £3.08 million last year, so the loss of £2.7 million for the full year was well covered by new investment.

"Having completed a number of major de risking milestones at Araguaia during 2013 in terms of geology and metallurgy and with nickel futures in mind, we are eager to progress the project towards production", said chairman David Hall.

"We therefore look forward to detailing the results of the prefeasibility study as soon as available and proving the potential viability of this major nickel project for Horizonte as we continue along our clear path to generate significant value uplift for shareholders."

Horizonte's share price dropped roughly 1.6 per cent to 6.25p on the AIM market following the news.

[haydock] 26/2/2014 09:41

APF hold 11% & a royalty.
With thanks to:

Bloodinthestreet2
24 Feb'14 - 18:15 - 3229 of 3229 0 0


see below Beauford and Finncap upgrade 50p target - now thats more like it -also an article on minesite today


Horizonte Minerals Plc Rating Reiterated by Beaufort Securities (HZM)

Posted by Shane Hupp on Feb 24th, 2014 // No Comments

Beaufort Securities restated their speculative buy rating on shares of Horizonte Minerals Plc (LON:HZM) in a research note issued to investors on Friday, Stock Ratings News reports.

HZM has been the subject of a number of other recent research reports. Analysts at FinnCap reiterated a corporate rating on shares of Horizonte Minerals Plc in a research note on Thursday. They now have a GBX 50.80 ($0.84) price target on the stock.

Shares of Horizonte Minerals Plc (LON:HZM) traded up 1.89% on Friday, hitting GBX 6.75. The stock had a trading volume of 110,043 shares. Horizonte Minerals Plc has a 52-week low of GBX 6.25 and a 52-week high of GBX 11.75. The stock has a 50-day moving average of GBX 6.21 and a 200-day moving average of GBX 6.5.

Horizonte Minerals Plc is a United Kingdom-based company engaged in the exploration and development of precious and base metals in Brazil.

[haydock] 25/2/2014 17:35

It's a new story here.
They may initially say more than the Old Guard, but don't count on it !

[gavapentin] 25/2/2014 17:33

I agree with P and H but just wonder why they haven't alluded to as much in their statement. If they have a very good idea they are sitting on a bit of a metaphorical "gold (coal) mine" then I would have thought they might have been tempted to say as much although perhaps it is all part of the underpredict and overdeliver....
Certainly the staff changes point that way.
Exciting times.

[stevie blunder] 25/2/2014 17:08

Remember they claim to be building a bulk commodities royalty business, so the gold royalty investments are potentially up for sale.

What would El Valle royalty bring? Do Franco Nevada do Europe?

Would somebody (anybody) want the Hummingbird royalty?

Maybe Blackrock could be persuaded, their World Mining Trust wants royalties, they recently changed their limit on unquoted investments from 10% to 20% to accommodate more royalties. Would we get our money back though? Not if we are seen as a forced seller.

If Isua doesn't produce in 2017 we get 30M$ back.

There is 15M£ cash and 20M£ Mining investments (small mining companies)

It still doesn't seem like a massive war-chest to build a stream of new royalties, so I would not be surprised to see a fund raising in conjunction with a large deal. Ie " We have the opportunity to invest in this great new low risk scheme which will be paying out in 2 years, give us 100M$ please"

I can't see them raising funds before lining up such a deal.

I am quite prepared to wait and see what kind of deals they can pull off, but it is only 3% of my folio.

[haydock] 25/2/2014 17:04

Piedro:6552
In a nutshell, exactly my thoughts.

Everything about this new BOD points to CDN coal action, that must surely be the sub-plot for the appearance of such an experienced crew.

[christh] 25/2/2014 15:18

quite a few suggestions in your posts today chaps,about what direction the company should follow to improve.
I suggest since you raised the issues and the solutions to get in touch with the
ceo or the chairman or the investors relations officer and be heard!

[piedro] 25/2/2014 15:05

I would suggest that they may be considering spinning off their Panorama Coal Corporation

If Atrium Coal can raise $20m in Australia at the end of 2011, with only the ex-WestHawk licences plus a few others; in 16 months have a JORC resource of 1,570Mt of high grade anthracite; share price up x10; be getting ready for production next year, then I don't think Anglo Pacific Group is going around with the begging bowl looking for a royalty offer.

AIMHO, BWDIK.

[noslien] 25/2/2014 14:25

QP is quite right. I can see no real advantage in having a short term facility, especially with cash in the bank. If APF has some really good projects in the offing they should seek long term financing to support them. To date I would have considered APF as being quite conservative; that may not have suited everyone but this change of tack leaves me nervous, because the new management is unproven. A nicely written strategy document does not deliver performance. I am not selling my shares just yet, but I am getting closer to doing so. Frankly, I starting to struggle to find things to believe in with this company, and other opportunities may offer better prospects.

[quepassa] 25/2/2014 13:39

But why use short-term debt to buy long-term assets? - That's generally a highly risky strategy. Just as most people would not take a one year loan to buy a house but a 15-25 year mortgage.

This reads to me more like a cash-flow timing / overdraft facility.

Debt/gearing can be fine. Up to certain prudent limits. - Although APF have a very long track-record of no debt and have always proudly set out their stall as a debt-free company. So this is a real change for APF. Whether the new short-term bank facility is out of strategy or cash-flow necessity is not explained.

They say it is for "funding flexibility". That can mean anything. They do not say it is to buy new investments. Before their large cash pile provided that flexibility but it has now shrunk a lot.

If they want to countenance gearing/debt to finance royalties or equity investments, the prudent course of action is to take on board medium or long-term debt not a 365 day revolver.

In today's market, I also would not consider that APF's equity portfolio provides much liquidity at all. APF are by nature not investing in liquid or readily marketable securities.

ALL IMO> DYOR.
QP

[amitkoth] 25/2/2014 12:46

Piedro, Treger also said that the $15m facility is a sign of the strategy coming. I personally have no problem with using debt, lots of cheap debt - for royalties which are close to production, which is their stated strategy now. It definitely beats issuing shares. With Kestrel etc it's a timing thing, this year was all about changes and I guess normal inflows will resume once production builds. The whole cash rich and debt free thing is fine, but doesn't drive strong returns. Also don't forget that the equity portfolio provides liquidity.

[piedro] 25/2/2014 11:14

I quite agree with QP - there is a question of how they will pay for future royalties, apart from their current royalty option obligations ...

Araguaia/Lontra Ni... $12.5m
Mount Ida Fe.......... $8m
ChurchRock U......... $10m
Dugbe Au.............. $5m

- that US$15m revolving credit as they say, 'provides additional funding flexibility'
- it's there as a safety reserve IMO
- where the hard cash for investments will come from is an interesting question
- they must be looking for $20-50m at least
- a Canadian fundraising could be a possibility

AIMHO, BWDIK .... and ... DYOR

[christh] 25/2/2014 07:53

The management have done the wisest thing in arranging loans from the bank.
The opportunity will come to buy more royalties and they need to have funds in place to aquire them.
It's like you are arranging your mortgage with the bank prior to buy a property.

Now they might not need the loan facility if the trading conditions change.
So if the royalties improve they will not need it.

It will be a different set of results next time with a very improved balance sheet and more earnings.
Pilbara is the most profitable project for Rio Tinto and that's where APF will
have its profits coming.
Rio is developing Kestrel and has a life for 15-20 years (need to look in Rio report) so the royalties will be coming steady and rising.
CDN is yet to be developed so we will see how it can contribute to the income.

[christh] 25/2/2014 07:37

QuePassa,
are you a shareholder?
have you invested in APF?

[quepassa] 24/2/2014 14:38

But your optimistic £12.5m (after tax) barely- if at all- covers the shareholder dividend.

That's worrying.

So if the APF Board doesn't want to take it on the chin and reduce the divi payout, there's nothing much left over from royalty income with which to buy new royalties without dipping further into their shrinking piggy-bank or drawing under the short-term bank facility.

You chaps know more about the Canadian prospects than I do.

Realistically HOW MUCH in pounds, shillings and pence can one honestly pencil in for Canadian coal income in each of 2014 and 2015?

You see, they say they want to buy more royalties but they don't seem to have much money to do that, especially with their hefty dividend commitment.

ALL IMO. DYOR.
QP

[piedro] 24/2/2014 13:42

'So just where is the money going to come from to make the much talked about future investments in new royalties, given that the current existing royalty income barely covers the dividend?'

Good question QC

I have an optimistic £12.5m from royalties pencilled in for 2014, presuming that Kestrel will give a little bit more and that the Amapa/Tucan iron ore will be contributing from mid year (when the port at Santana is operational according to Beadle Resorces)

As haydock suggests, we should perhaps look to Canada for the answer.

[haydock] 24/2/2014 11:13

Canadian coal perhaps ?
Or will they invest more of that short term cash in B.C.

The BOD is overloaded with experts on B.C. coal.
It will surely be a topic of conversation ?

[quepassa] 24/2/2014 10:41

Operating Profit £11.3million.
Operating profit after tax £9.1 million.

Dividend Payout for 2013 is c. £11.3million ( based on 110.8m shares at 10.2p)

They are paying out more in dividends than their (operating) Profit after tax.

I do ask myself how wise and sustainable that may or may not be.

Cash has fallen from £24million to £15.7m ( 2012 y/e v. 2013 y/e).

The Company have always seemingly prided themselves on being debt-free. This was a good thing in my view. Largely because they had large cash piles and growing royalty income.


Now they are lauding a $15m one year Bank facility which they have just signed which provides additional funding flexibility. They apparently never needed such a thing in the past. They buy long-term assets so why do they need a short-term facility?

Net assets down a whopping amount from £301m to £217m
Loss after tax of £42.5m attributable to shareholders.

In my view, if they continue with the current dividend policy ( which they maintained but did not increase), they won't have much , if any , excess royalty income to invest in new royalties without further diminishing their already shrunken cash pile and/or drawing under the bank facility.

So just where is the money going to come from to make the much talked about future investments in new royalties, given that the current existing royalty income barely covers the dividend?



ALL IMO. DYOR.
QP

[haydock] 21/2/2014 09:52

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Nowt said about CDN coal, when they are clearly packed on the BOD with CDN coal experts !

Anglo Pacific Maintains Its Dividend, Despite Losses

21 Feb 2014






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

Anglo Pacific suffered a substantial after-tax loss in 2013, but only after exceptionals are taken into account.

The loss was largely due to impairments related to equity holdings and changes to reporting standards.

In that context the company will continue paying the customary dividend.

Anglo Pacific points to Rio Tinto's plans to expand the Kestrel operation, where Anglo's principal royalty is, as well as the high demand for alternative financing, as major factors which will improve the company's business going forward.

Anglo Pacific is a company which focuses on commodity royalties with an emphasis on base metals and bulk materials. Within Anglo's portfolio are royalty producing assets in Brazil, Europe, and Australia as well as a strong pipeline of development stage and pre-development stage assets which are scattered across the globe.

In the year to December 2013 Anglo Pacific's gross royalty income was £14.7 million, a small shortfall when compared to the previous year. Impairments of £26 million were taken on mining and exploration interests, while impairments of £8.3 million were taken on royalties relating to the Ring of Fire, Mount Ida, Bulqiza and Araguaia projects.

In total, Anglo Pacific reported a loss after tax of £42.5 million, a significant reverse on the £11.2 million profit reported in 2012. However, the company was keen to emphasize that royalty income means that it remains profitable when accounting charges are stripped away. .

Anglo's adjusted after tax profit was £9.1 million, a slight reduction when compared to the £9.4 million achieved in 2012.

As a result, the company has recommended a final dividend of 5.75p per share , maintaining the total dividend of 10.2p for 2013.

Chief financial officer, Kevin Flynn, explained in a conference call on Thursday: "Although headline earnings per share represents a loss of 39.01p in 2013 compared to 10.67p profit in 2012, several valuation adjustments drive this movement. Omitting this results in adjusted earnings per share of 8.39p compared to 8.69p in 2012."

A substantial portion of the pressure on earnings came from the crystallization of previously unrealized losses in the company's equity portfolio, as well as impairments to the group's long lead time royalties. In addition, the decline of dollar currencies resulted in losses.

Chief executive Julian Treger commented: "Despite the current challenges facing the global mining industry, the company continued its underlying profitability during the period. We have maintained our total dividend for the year, as we view the potential outlook for the business as being one where we expect to see future growth.

"We see good opportunities to add quality assets to our portfolio and, under a new management team, we believe we are well positioned to leverage our strong relationships with major metals and mining operators to access new royalty transactions. Our current focus is on diversifying our existing asset portfolio and securing near-term, cash producing royalties. The strategic focus on base metals and bulk materials royalties provides the company with a clear differentiated strategy from its North American listed precious metals peer group."

Anglo's share price has was steady following the news at 205p on the LSE and C$3.35 on the TSX.

Back

[haydock] 20/2/2014 10:47

Discussion on the new Exec. with thanks to Piedro:


another Director with Canadian coal mining experience
- will they be forming a new company to explore Panorama?





haydock
20 Feb'14 - 10:46 - 907 of 907 0 0 edit


Well with the experience of our neighbours in the mkt, as a B.C. coal company.
They could do worse than float a separate company to develop the assets.

New style management ?

This lot should certainly know far more about the value of the B.C. coal than they original board seemed to, and how to monetise that asset.

[haydock] 20/2/2014 10:21

The rapid cut-back of expansion to slow long-term supply, will prolong a super cycle scarcity premium for explorers. That is where Araguaia fits in; an advanced major nickel project progressing towards the full feasibility stage which can fill the gap that will inevitably appear in the nickel supply and that will see us realise higher prices than those currently in play.

The recent announcement by the Indonesian government, banning all exports of direct shipping nickel ore, should have a positive effect on the nickel price in the mid-term if the ban continues to be fully implemented. Indonesia was estimated to account for around 18% to 20% of all nickel ore imports to China. This growth from only 14% in 2007 has been driven by demand from China, to feed the country's increasing consumption of nickel pig iron and latterly RKEF production.

The fundamental issue, even without the strict implementation of the ban, is that beyond 2016 the nickel industry is facing a lack of new projects to continue to supply the industry. This positions Horizonte with its Araguaia project prominently to take advantage of this new exciting nickel cycle. Metal forecasters predict that by the end of 2016 a switch will occur in the supply-demand dynamics of nickel resulting in underlying demand outstripping supply and therefore an upwards drive in nickel prices as we bring Araguaia on line.

Having completed a number of major de risking milestones at Araguaia during 2013 in terms of geology and metallurgy and with nickel futures in mind, we are eager to progress the project towards production. We therefore look forward to detailing the results of the PFS as soon as available and proving the potential viability of this major nickel project for Horizonte as we continue along our clear path to generate significant value uplift for shareholders.

[quepassa] 20/2/2014 09:29

BWDIK!!

That's a new one for me.

I like that....internet slang for...BUT WHAT DO I KNOW !!!

Maybe APF should add that to their announcements.

Smiling!

ALL IMO. DYOR.
QP

[piedro] 20/2/2014 09:13

LOL !!

Still going thru the finer details.

some quick thoughts ...
- they are getting their paperwork sorted out
- all losses are of a paper/timescale nature
- physical assets are unchanged and maturing

AIMHO, BWDIK considering my investment outlook
is in the order of 10-20 years.

Happily I can today report that APF is giving
me a return on capital of 21.4% annual at the present
price

GLTA and keep smiling.