Anglo Pacific Share Discussion Threads

[bolador] 09/10/2014 09:38

I believe APF paid $30m for the royalty. If it now has to written off it may take some time because of the put APF has to get its cash back if LM production has not started by 2015. This will be negotiating item only as a new investor in LM is hardly likely to bail out APFs position in full or maybe not at all.If the investment is gone the effect on APF is not lethal with an nav in excess of 160p?. We clearly need a statement.

[stevie blunder] 09/10/2014 09:37

I'm sure it will involve a write-down. Possibly 100% From the 2013 AR:

Royalty instruments represent the EVBC, Isua and Jogjakarta royalties, which are accounted for as financial assets. These are carried at
fair value on the balance sheet as they represent financial assets in accordance with IAS 39. The decline in value is largely attributable
to project assumptions for Jogjakarta along with a risk assessment of operating in Indonesia.

I suspect fair value in this case to be the acquisition value of 30M$ as I dont remember any earlier writedown.

On the positive side, the royalty should attach to the mineral concessions (as I understand it) so that any future operator would also have to pay, Of course the existence of the royalty as a burden on the concession would tend to make the project less attractive to a new operator. And it will probably be a long time before you can finance a base metal mine in Greenland.

[neilyb675] 08/10/2014 17:15

have asked Rachel for clarification on this..

Anglo Pacific Group PLC
Acquisition of Iron Ore Royalty from London Mining

Anglo Pacific Group PLC ("Anglo Pacific", the "Group") (LSE: APF) (TSX: APY) announces today that it has agreed to
purchase a 1% gross revenue royalty on London Mining PLC's ("London Mining") Isua iron ore project in Greenland
for US$30 million. Anglo Pacific has entered into a royalty agreement with London Mining and its wholly-owned
subsidiary, London Mining Greenland A/S ("London Mining Greenland").

London Mining has commenced work on a feasibility study for the Isua project based on a 15Mtpa open pit and
processing operation with a 15-year initial mine life. Production is targeted for 2015.

The royalty agreement contains a number of trigger events, the occurrence of which will allow Anglo Pacific to
convert the royalty back into the US$30 million consideration, the satisfaction of which can be in cash or London
Mining shares at London Mining's election. Trigger events include a failure to fulfil certain milestones,
including the completion of a bankable feasibility study by 31 December 2012 and obtaining an exploitation licence
by 31 December 2013.

Commenting on the acquisition, Peter Boycott, Chairman of Anglo Pacific, said:

"We are extremely pleased with the acquisition of the royalty on the Isua project. The acquisition enables Anglo
Pacific to strengthen our focus on steel making raw materials and we believe that this will deliver considerable
long term revenue growth and cash flows for the Group and its shareholders. Anglo Pacific remains focussed on the
acquisition of royalties that will enhance the value of our royalty portfolio and will enable the Group to
capitalise on long term growth in key Asian markets, as well as providing additional diversification in our
exposure to key commodities."

For further information:

[rcturner2] 08/10/2014 16:55

Chris, last interims showed a loss and 10% off the NAV in 6 months (what since then?).

You consider that to be "strong"?

[rcturner2] 08/10/2014 16:52

chris, I have held APF twice in the past, both times profitably.

I am well aware of their business and what the new guys are trying to do. Mining is under massive pressure at the moment hence why they are looking outside the traditional areas. I also know about the massive NAV write down and I wouldn't bet on more of that to come in the next results. The dividend is also not covered properly in my opinion. As I said above I am happy to wait to see what the next set of results bring before deciding whether to rebuy or not.

[christh] 08/10/2014 16:41

RCTurner2 8 Oct'14 - 16:14 - 6728 of 6728

Obviously you must be new to APF.

APF has been delivering strong results and was in the FTSE250 about 2 years ago.
Perhaps KESTREL was the most promising royalty and the one producing the most profits but now other royalties are coming into fruition and will deliver good income for APF.

Now its the time to pile in as it is undervalued as the media pointed out.
If you are looking for short term gains you are in the wrong stock.

This is a long term stock with very good yield and at the current share price the yield is roughly about 11%.

[rcturner2] 08/10/2014 16:14

Is this your normal strategy when you get desperate to just quote the RNSs?

[neilyb675] 08/10/2014 15:49

We have made revitalising the royalty pipeline a priority. We remain keen to seek larger, more transformational deals, which should accelerate our diversification and reduce dependency on Kestrel; and, in the meantime, we are also progressing a number of smaller deals. We continue to be optimistic about our ability to deliver royalty investments in increasing volumes in the near term.

[neilyb675] 08/10/2014 15:47

However, management believes that there is strong recovery potential in the Group's fully funded existing portfolio, exposed mainly to coking coal and iron ore, should the anticipated global GDP growth correlate into higher prices for these commodities.

We believe coking coal prices will show signs of recovery over the medium and long-term, and that continued improvement in global economic growth and further closures of high cost mines will support commodity prices in general. With an expectation of a return to production in our private royalty land at Kestrel, along with the Group's view that bulk commodity prices have limited room for further falls, Anglo Pacific can commit to maintaining its dividend in the short-term with a view to increasing this when conditions provide.

[neilyb675] 08/10/2014 15:32

watchlist and holdings are not the same thing.

I actually own shares in real life, unlike yourself where its all fantasy trades. Big difference IMVHPO.

[rcturner2] 08/10/2014 15:27

A list of your shareholdings lol, you really pick them.

[neilyb675] 08/10/2014 15:08

Lots of shares are at 52wk lows.....LAD, APF, BBY, MRW, TSCO, BRCI

Time to buy quality.

[emeraldzebra] 08/10/2014 12:58

QP - i think a good chance of that - if 'good' is the right word.

[quepassa] 08/10/2014 08:49

I ask myself if this share is headed for sub 100p in short order.

ALL IMO. DYOR.
QP

[gavapentin] 08/10/2014 07:00

Although I think/hope quite a bit has been priced in!

[rcturner2] 07/10/2014 20:45

Anyone thinking of buying here should wait for the next set of results, which could be horrendous.

[noslien] 05/10/2014 21:27

Indeed what a mess. Could be quite a hit to apf's balance sheet. Surprised the price hasn't fallen further.

[stevie blunder] 04/10/2014 22:38

London Mining LOND issued a very worrying statement on 29 Sept. They are running out of money and not likely to survive without a quick injection of cash.
This affects APF because the Isua royalty has a "put" available to APF in 2017 for 30M$, payable in LOND shares or cash. ie LOND have to return the cash if they are not in production.
That looks a bit fanciful now balanced against a LOND market cap of 6M£
The existence of the put will also give LOND problems in negotiating a rescue share issue with a new investor which they are trying to do right now.
The Ebola crisis in Sierra Leone doesn't help. I think there is a very good chance that LOND is toast, and so is the Isua royalty.

What a mess. Of course the real losers are the people of Sierra Leone.

[quepassa] 01/10/2014 08:36

Not such a rosy picture is painted in your referenced article of which this is a key extract:-

Quote

In its September quarter report, The Bureau of Resources and Energy Economics (BREE) said global commodity supply had grown significantly over recent years, placing pressure on prices in the medium term.

It said producers will need to continue to focus on managing costs and improving their competitiveness in order to survive downturn in the price cycle.

Coal prices are expected to remain ‘subdued’; for the rest of 2014 as demand remains sluggish coupled with an abundance in supply.

BREE said some coal operations are unprofitable at this level, and said cost-cutting in the form of mine closures or production slowdowns would become common.

Contract prices are expected to decline by 6 per cent to settle at US$77 a tonne. From 2016, the market balance is expected to tighten as import demand continues to increase and lower prices during 2014–2015 reduce investment in new capacity and force less competitive operations to close.

Unquote


All IMO. DYOR.
QP

[christh] 01/10/2014 07:46

Glencore predicts strong market ahead for thermal coal
1 October, 2014 Cole Latimer

[quepassa] 30/9/2014 17:07

Please accept my apologies for mis-using the word "counter".

ALL IMO. DYOR.
QP

[bhoddhisattva] 30/9/2014 16:35

Que Passa - I wasn't recommending the list nor did I write the article and it is interesting you use the word "counter" as if I am pushing the article or share when all I did was post a link.

As RCT says the article describes the - methodology and it included having been a faller over 3 years and hence largely forgotten about - recommend reading the article.

Also agree with the caution about high yielders (though that was not the prime thrust of this approach) as all too often it indicates a cutting of the dividend ... and some of the others I wouldn't look at for a variety of reasons.

[rcturner2] 30/9/2014 15:17

QP, the list isn't driven by the yield. They were looking for 3 yr fallers and then filtered by yield and cover.