Anglo Pacific Share Discussion Threads

[lord gnome] 08/6/2018 20:58

Yes, QP. It does seem an odd way to do the deal.

[quepassa] 08/6/2018 15:45

Strange structure. And small deal size of $1m

Consideration to be effected by way of issue of new APF shares which Entree can sell after a very short 90 days from closing.

Isn't that going to put a big potential overhang on the share price ? I can't imagine that Entree Resources are a long-term holder if they negotiated a very short 90 day lock-in. Entree also retain the right to receive between 20% -10% of any royalty income for the next 21 years.

Well, at least it's not coal but it seems to me like a weird and unnecessarily complex structure and creating a potential self-inflicted share overhang as well as further shareholder dilution.

Why didn't they just cough up cash for a modest $1m?


ALL IMO. DYOR.
QP

[stevie blunder] 15/5/2018 09:24

Fairly dull trading update, but I found this interesting:

The announced sale of Kestrel during the quarter was ~50% higher than what the market had anticipated in 2017, suggesting a potential upside to our Royalty. This should benefit Anglo Pacific as the beneficiary of the vast majority of royalty payments over the next 8-10 years."

That is a good bit longer than I had expected.

[wallywoo] 17/4/2018 15:50

Could be this:



APF have a 2% NSR at this mine so a 25% increase should be significant improvement

Could also be that Rio Tinto recently sold its 80% stake in Kestrel Coal mine (APF's largest royalty)

[douglas fir] 17/4/2018 13:52

DeclaredTypeDirectorPos.Volume / PriceValue
10/04/18BUY Michael Blyth RES1,660 @ 151.80p£2,520
05/04/18BUY Robert Stan NED26,225 @ 152.63p£40,026
29/03/18BUY Julian Treger CEO25,000 @ 149.00p£37,250
29/03/18BUY Patrick Meier CH16,111 @ 151.00p£24,328
28/11/17BUY Robert Stan NED4,150 @ 141.00p£5,852
28/11/17BUY Robert Stan NED10,850 @ 143.00p£15,516


Canaccord Genuity Boosts Anglo Pacific Group (APF) Price Target to GBX 200

Posted by Justin Noah on Apr 16th, 2018
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Anglo Pacific Group logoAnglo Pacific Group (LON:APF) had its price objective raised by equities researchers at Canaccord Genuity from GBX 195 ($2.76) to GBX 200 ($2.83) in a report released on Thursday, April 5th. The brokerage currently has a “buy” rating on the stock. Canaccord Genuity’s target price indicates a potential upside of 33.14% from the company’s current price.

Separately, Peel Hunt restated a “hold” rating and set a GBX 161 ($2.28) target price on shares of Anglo Pacific Group in a research note on Thursday, February 8th. One equities research analyst has rated the stock with a hold rating and three have issued a buy rating to the company. The company presently has an average rating of “Buy” and an average price target of GBX 175.50 ($2.48).

[norry2] 17/4/2018 13:33

Any ideas what is behind the big rise today?

[petewy] 28/3/2018 10:39

Results looking healthy or am I missing something? price drop 4p

[lord gnome] 28/3/2018 09:32

Nice rise yesterday. Somebody must have wanted 'in' ahead of today's numbers. Nice set of results. No surprises to anyone on this board, but most satisfying all the same. The company seems to have found its feet and knows where it is going. Now debt-free, with cash in the bank, paying quarterly dividends and rising, seeking investment opportunities to diversify away from an over-reliance on one asset. High yield, low PE. What's not to like. Happy to hold.

[neilyb675] 21/3/2018 12:35

People don't punt in billions 😎

[uncle john] 21/3/2018 09:37

From an analyst, Today's News:
Any comments,

Rio Tinto (RIO) sold its stakes in the Hall Creek coking and thermal coal
mining complex in Queensland to Glencore for US$1.7bn.

This price would value Kestrel, their remaining Australian coal asset at
around $1.3bn. Rio’s owned around 80% of Hall Creek and owns about
65% of Kestrel. In 2017 Hall Creek produced around 20% more
attributable coking coal than Kestrel, while it also produced quite a lot
more thermal coal. Kestrel attributable reserves were however a bit more
than Hall Creek’s, so this should be worth a bit more.

$3bn for coal assets valued at $2bn back in October 2017. Sky News called the deal a $1.7bn coal punt by Glencore.

[sogoesit] 12/3/2018 16:27

illiswilig: thanks for your informative post.
Not to forget that tariffs are still a negotiation as Trump has exempted Canada & Mexico (maybe he was using it as pressure for the NAFTA negotiations?) and recently Australia and has talked of exempting "strategic allies"... whatever that means.

[petewy] 05/3/2018 20:10

Interesting exchange you two. But do I stay in or out as I think coal is dead and was about to sell before your correspondence started. (Switching to wind tech, TRIG pays a divi.)

[quepassa] 05/3/2018 18:35

Hi illiswilig,

Great and very informative post. Thank you.

Fully agree in all respects.

It will be interesting to watch how the Trump steel tariffs pan out over time and the impact they have on the markets.




You make some very good points about Kestrel.

Best wishes.

QP

[quepassa] 05/3/2018 06:22

You don't understand.

Steel mills use TWO types of coal.

One to mix/alloy carbon with iron to make steel - COKING COAL

One to heat the furnaces/melt the metal - THERMAL COAL.


The pollution is a key issue and the Chinese steel mills are blamed by the Chinese authorities as being one of the major culprits of their city air pollution crisis.


APF has risen from a 50p low to 150p. However, some 8 years ago the apf share price was c 350p.
A 60% reduction over 8 years when the FTSE is up by around 40%.You may think this is great performance. But it isn't.

Your understanding of these matters is woeful. Same mistake as with EasyJet.

You failed to comprehend how the airline Price War and Brexit would impact EasyJet as a British carrier. The same Price War which caused Alitalia, Air Berlin and Monarch all to collapse.

Just as you fail to comprehend how the USA putting 25% tariffs on steel imports will make the domestic US steel manufacturers more competitive and will have a knock-on negative effect to demand for imported steel.

You have little or no understanding how the MARKET and GLOBAL EVENTS impact companies and believe that companies operate in bubbled isolation not impacted by geopolitical events which you naively write off as "irrelevance".

ALL IMO. DYOR.
QP

[rochdae] 04/3/2018 22:05

The anti-pollution stuff is a different type of coal.

If Apf was doomed why has it risen 300% in the last two years.

Seems to me the same global analysis applied and all company specific analysis ignored. Same mistake with EZJ.

[quepassa] 04/3/2018 06:29

Not behind the times but ahead of the times! The Chinese authorities have been shutting whole swathes of mills since 2017.

Don't need to believe me , believe the FT:

"Chinese steel production to slow sharply in 2018
Market hit by oversupply likely to benefit from anti-pollution measures"

Google the FT article dated January 8th. 2018 written by Michael Pooler.



Well, all of a sudden foreign steel imported into the USA has become 25% more expensive. If you don't think that helps/stimulates domestic USA steel manufacturing and production, we must agree to disagree.

Many of the existing USA mills are barely ticking over and production at existing plant can readily be ramped up.

You make a good point however about Kestrel which has been the main cash-cow for a long time used to support overly generous dividends. That cash-cow's value is being written down as she gets nearer the end of her useful life and most of her profits have been spent on divi's rather than reinvesting in other royalties.


Regards

ALL IMO. DYOR.
QP

[illiswilgig] 03/3/2018 22:48

QP-'It has fallen primarily because the Chinese authorities have been shutting whole swathes of steel mills '

Once again I like your thinking. But it's a bit behind the times.

Chines steel production fallen? And how does that fit with Chinese Steel Production hitting an all time high in August 2017 of 74594 KTonnes? (source tradingeconomics.com). Oooooops :-)

Whether US tariffs will actually stimulate signficant additional US capacity or just keep uncompetitive mills in operation remains to be seen. I can guess which it will be. Restarting mothballed steel mills takes years and so does building new ones. By then the Kestrel royalty on APF land will be all but mined out.

APF have only a few years left to figure out life after Kestrel. It will be interesting to see what they come up with.

cheers

[quepassa] 03/3/2018 15:13

"geopolitical stuff is an irrelevance"

you couldn't be more wrong.

tariffs on steel which uses coking coal as a key ingredient during manufacture are of central importance.

why don't you also write Brexit off as a geopolitical irrelevance. It's equally all to do with trade and trade tariffs.

if USA significantly ramps up its own domestic production of steel which is the specific intention of Trump, it will significantly - AND I MEAN SIGNIFICANTLY- reduce GLOBAL demand for steel from other countries and this will in turn impact in a major way demand/prices for coking coal in my view.

illiswilgig is a little wide of the mark when he says China steel exports have fallen because of ships, cars etc etc. It has fallen primarily because the Chinese authorities have been shutting whole swathes of steel mills in order 1)to curb massive overcapacity and 2) to attempt to bring their pollution crisis under control.


ALL IMO. DYOR.
QP

[stevie blunder] 03/3/2018 15:09

The Kestrel Royalty was valued at about £107M at the half year. I think that is based on an NPV calculation using assumptions of future coking coal price and production on APF land and using an appropriate discount rate.

If we are getting £25M - £30M in annual royalties, then it is valued at say 4 years production. I hope that is conservative.........

They need to get the finger out to replace that income stream!

[neilyb675] 03/3/2018 15:01

Rochdae

Spot on

[rochdae] 03/3/2018 14:55

Apf doing very well as a business. The chart is reflecting progress. The geopolitical stuff is an irrelevance. Can see further strength here..

[quepassa] 03/3/2018 14:46

if you carefully read my post, I said COUNTRIES SUCH AS China and KOREA.

SUCH AS.

However, if you combine the Asian steel producing countries namely, South Korea, China, Taiwan and Japan, they jointly sell more steel to USA than Canada.

The BBC news website contains a table of stats of USA Steel Imports sourced by the BBC from The USA DEPT. of COMMERCE

Go to BBC NEWS and search Trump Steel tariffs. There is an article headed "Trade Wars are good" which contains the table.



Of course the tariffs will impact Canada enormously but it will also significantly impact Asian countries and they are the ones (not Canada) who import Australian coking coal which is relevant to this bulletin board.

Move on to other royalties? Heard that one before!

Cheers.

[illiswilgig] 03/3/2018 14:09

Ha ha! Nice one QP. But you'll have to try a bit harder I'm afraid.

It seems quite believable, given the media hysteria over cheap Chinese steel, that China would be a major supplier of steel to the USA?

But it isn't. Canada is no1. Followed by Brazil, Korea, Mexico etc etc. China is not even in the top 10.

No need for China to protest, Canada, Brazil and Korea will be doing it all and suffer a lot more than China from any actual tariff (as opposed to threatened tariff)

Furthermore Chinese Steel exports have fallen for 3 years in a row. There's a reason for that. All those new power stations, aircraft carriers, car and aircraft factories devour vast amounts of steel. More every year.

APF royalty on Kestrel output is only going to last a few more years. The faster they burn through it and move onto other royalties the better as far as I am concerned,

regards