Anglo Pacific Share Discussion Threads

[1knocker] 22/12/2021 12:32

I have held these for a long time, and it has been a fairly wild ride at times. I sold some in May 2020 at 160, and have neither bought nor sold any more since then until a couple of days ago bought back at 126.8. I am leary (for obvious reasons) about buying at the end of a strong year, and the new CEO (a crucial appointment, as he can make or break a company) is still unknown, but the portfolio looks good to me, the balance sheet is in good shape (though, whatever the company, I always like to see lower debt!, the macro outlook appears good to me for miners, and high inflation and rising prices tend to favour the royalty companies. Nothing in life is certain, but I am bullish the sector and the looks a decent bet to me at the current price.

[laurence llewelyn binliner] 20/12/2021 22:18

#The Deacon, that timing is rather convenient.., he's got the experience in royalty and streaming we need, Q1 for the short list and decision vote, but we do not know how far along proceedings are currently, JT has us very well positioned for the future now before he moves on...

[the deacon] 20/12/2021 21:33

Re the next CEO, I'd like to see Fred Bell from Elemental Royalties - assuming todaya Gold Royalty Corp bid gets accepted for Elemental. Fred would be an excellent fit - energetic, communicative and hungry for success. Could be ideal timing??

[laurence llewelyn binliner] 20/12/2021 18:10

#Troc1958, on BRN, it is a staged investment, currently a 1.25%GRR over both Nickel and Cobalt, but APF have options for a phased buy in all the way up to 4.25% depending on how the plant plans come together so it does not need to be all in 1 hit and USD70M, it can be phased in over time and has flexibility which will suit our free cash position as we pay the VB loan debt down..

Earnings will start from H1/Q2 2022.. although minimal to begin with..

[troc1958] 20/12/2021 14:38

Interesting that they hinted in their last presentation at buying (topping up) the Piaui cobalt and nickel royalty in Brazil as their next investment. Will cost them 70million for which they already have the financial facility available. Current and potential investors should a look at Piaui on the Anglo website. Economics of this possible investment seem exceptional.It's understandab about his 3m share overhang. He will probably drip sell into the market once he's left and as a less than 3% shareholder he won't have to report anything to the market. Looking forward to seeing who they appoint as new CEO. Someone dynamic yet conservative I hope.Troc

[quepassa] 20/12/2021 14:06

Indeed. Exactly. That's the point.

What Binliner describes adds weight to likelihood of further selling.

Potential overhang of another 3 million shares.

Being watered-down from an intention to keep 75% of pre-existing to a significant amount is not positive for the share price.

ALL IMO. DYOR.
QP

[sporazene2] 20/12/2021 12:27

agree @LLB. a reasonable assumption that as we now have the RNS that he is finished for time being?

[laurence llewelyn binliner] 20/12/2021 12:16

JT is leaving in 3 months time, so it is not at all surprising to see he wants to invest into his new project (East Coal / CoTec Holdings Corp) and is helping them transition towards a greener future..

APF will be paying a 7p basic dividend forever, and a bonus dividend on top for FY2021 for starters, a decade of that is fine by me, JT has restructured/rebuilt the fund, and set us up for growing it further via BRN, Incoa, Dugbe, all we need to do now is steer the ship in a straight line, smash the debt down, count the income and crank out the dividends it all generates, and given that position it is not at all surprising to see him move on and start to build something else..

EastCoal Inc. announced that Mr. Julian Treger, a person closely associated with Kings Chapel, has, subject to completion of the Private Placement, agreed to join the Company's Board of Directors as Non-Executive Director. Mr. Treger is currently the Chief Executive Officer of Anglo Pacific Group Plc. During his tenure at Anglo Pacific Group, he has made $450m of acquisitions, transforming the business from a coal-based royalty business to a battery focused streamer, whilst increasing income from £3m in 2013 to close to £60m in 2019 pre-covid. Mr. Treger also serves as non-executive chairman of Audley Capital Advisors llp. In addition, Mr. Treger holds external non-executive directorships with Mantos Copper S.A., Broadwell Capital and BSL plc

News of our incoming CEO is getting closer.. :o)

[otemple3] 20/12/2021 11:57

I guess that's one view. In my view the NED buy was far more significant in my eyes

[quepassa] 20/12/2021 11:38

The prior 75% of pre-existing shareholding intention has today been watered down to "SIGNIFICANT PORTION".

Whatever that means....

It is interesting to back-track carefully through Director Selling RNS's since 30/6/21 and to do the maths. As well as reading the hitherto repeated statements of intention.

In my opinion, today's RNS is most certainly not a comfort to shareholders and may or may not raise the distinct possibility of further selling.


ALL IMO. DYOR.
QP

[laurence llewelyn binliner] 18/12/2021 08:52

Cobalt through USD70,000 a tonne now, setting the stage nicely for 2022..

VB production 2019 | 1,608 tonnes
VB production 2020 | 1,592 tonnes
Q1-2021 | 476
Q2-2021 | 463
Q3-2021 | 396
Q4-2021 | est 425
FY2021 est | 1,700 total
APF income above USD16M and top end of our estimate
2021 FY income somewhere between USD70-75M

2022 estimate | 1800 tonnes as UG grades increase
APF share 410 tonnes at @70,000 per tonne cUSD29M income (less cost of sales)

I also note Wheaton have been stockpiling their Cobalt this year so far and hoarding for stronger prices, I think we are selling it as we get it delivered though..

VALE target for the UG mine extension is 2,500 tonnes a year by 2024/25 as the grade goes up, and that puts our share at 570 tonnes with USD40M income at todays prices, but Cobalt could go a lot higher yet, the 7,600 tonnes stream terms at 22.82% will take around 15 years before reducing.. :o)

[otemple3] 17/12/2021 20:41

Perfect, thanks

[otemple3] 16/12/2021 18:20

Does anyone have a link to a fairly accurate data source for Kestrel pricing - so many coal prices out there and huge variability between all of them so hoping to find something credible to trackThanks

[laurence llewelyn binliner] 16/12/2021 14:38

#Bisiboy... yes 1.75p per quarter is sustainable over time, it costs the company GBP15M/USD20M plus the bonus FY dividend, so it is covered around 3 times this year, and the VB royalty almost covers it stand alone, the only reason dividends were shuffled around this year and compressed was to keep us inside lending covenant leverage multiples for the VB acquisition..and dividends is the reason most of us are here..

[bisiboy] 16/12/2021 14:12

thank you laurence.
do we think then that 1.75p per quarter is sustainable over the longer term as a minimum.
appreciate only short term guidance unless i have misread trying to work out if i can
rely on income with some confidence

[the deacon] 15/12/2021 11:54

Interesting few days for the other London based royalty companies. Altus and Trident picking up portfolios from Newcrest and Orion respectively. Wheaton also picking up a stream on Artemis's Blackwater project. Interestingly from Altus and Trident the portfolio's are very much gold focused.

[laurence llewelyn binliner] 14/12/2021 13:50

#Bisiboy, the dividend from 2022 will be 4 * 1.75p and a bonus special dividend pending the FY results, but with 2021 being a very strong year we are expecting one too.. :o)

Notwithstanding that, a FY bonus needs to be tempered with debt payback, and the faster that happens the faster we can build the portfolio..

[bisiboy] 14/12/2021 13:16

are we expecting a cut to the pence per share dividend or an adjustment to the 30-60% range through earnings growth?

[the deacon] 10/12/2021 08:28

I'm hopeful the new CEO has relevant experience in the Canadian/North American markets. If APF is to grow into a $bn diversified royalty and streamer then the underlying drive for that growth has to come from there. I'd like to see APF much more active in North America. With the potential commodity 'super cycle' and expectations of supply deficits in those commodities APF has exposure to, there's absolutely no reason why the diversified R&S companies can't emulate the performance of their precious metals focused peers over the last decade or so.

[laurence llewelyn binliner] 10/12/2021 08:19

A reduced dividend payout is never well received, but we need to reduce the debt burden and the faster that is done the better reducing interest due on it, enabling faster growth of the income portfolio.

We knew four 1.75p payouts and bonus potential was scheduled for 2022 and that regime is totally acceptable, value will show itself in the share price over time as the debt comes off and portfolio grows, a USD1BN fund is a good target for our new CEO to work towards.. :o)

[cocopah] 10/12/2021 07:56

#Deacon, thanks, having now had the opportunity to listen to it I agree with your succinct synopsis. Interesting comments on divis … payout ratio going from an (obviously) elevated 75% to 30%-60% range and 4 regular payments of the 1.75p. No real info on the possible yr end ‘bonus’ we’ve got used to, however a clear focus on reducing the borrowing. Perhaps Q4 upside will be good enough for both? Also interesting comments on potential mergers … with a nod to independence and growth to a billion dollar enterprise. Sounds like there are a couple of hot irons in the fire on the investment front too.

[the deacon] 09/12/2021 21:17

I thought the presentation was very positive. Initially I was apprehensive given KF's usual less than enthusiastic style. He presented very well, as did our CIO. Nothing in the presentation that we didn't already know. Circa $70m of firepower, expecting a strong end to the financial year, bullish on Piaui but made it clear there was no obligation to commit further funds to it. Funds being directed towards further growth - so no share buybacks on the cards at the moment. Management reiterated that scale is the key to a successful royalty company. They believe the company is fundamentally undervalued and they're trying to rectify that. CEO succession is ongoing. Committee will choose JT's successor in the not too distant future. Company bullish on cobalt outlook. Questions were raised about battery manufacturers trying to phase out cobalt. Company confident that cobalt is a key material (esp in Western markets) and even a reduction in EV related cobalt consumption would still be a significant increase in demand vs today. Company working on new deals. In general it was very positive, imv.

[cocopah] 09/12/2021 20:50

#LLB … have you any information from the Investor Meets presentation … I can’t find anything on the web.🤷‍♂️ Thanks.👍7995;

[laurence llewelyn binliner] 09/12/2021 14:06

#Sporazene2, it looks like the updated Candente PEA is now slated for early Q1-2022, but nonetheless it is inching forward, along with many of our other royalties..

IMC soon @4pm today with Kevin and Mark..

Interesting trading here yesterday and a 138p UT, mostly P-ALGO flags, so this is getting robot traded, maybe the BOTS spotted the scope for a breakout I saw last week.. :o)

[sporazene2] 09/12/2021 13:19

FYI Candente Copper have provided a PEA update earlier

Would not surprise me if FMG made a move for them soon