Anglo Pacific Share Discussion Threads

[sammu] 12/7/2022 08:50

An opportunity to buy this news, if you think it positive, ahead of the Canadians and Americans.

[troc1958] 12/7/2022 08:25

Must admit I didn't expect this South32 deal. I was focused on them announcing the Piaui extention. This S32 deal seems quite expensive, however it's future revenue does match the drop in Kestrel revenue; so quite a shrewd move. Getting S32 on board as a major shareholder could be quite beneficial for opening up future opportunities. Let's see how the market views this deal. Positively I hope.Are they now going to shelve the Piaui extention?

[masurenguy] 12/7/2022 08:22

One has to take a longer term view on the significance of this acquisition rather than focus upon short-term copper and nickel prices. It makes more sense to buy when those prices are lower than when they are closer to recent highs. Looks like a good long-term deal to me.

[johnrxx99] 12/7/2022 08:19

I'm wondering what the divi investors will make of it.

[johnrxx99] 12/7/2022 08:14

Market seems to like it off the bat. I hope the uncertainty of the metal prices adjustment entered into negotiations but in this market a balance is difficult to reach.

[the deacon] 12/7/2022 07:57

Some good quality assets with top operators in that S32 portfolio. Helps provide that crucial visibility on medium term revenue as Kestrel falls away. In fairness APF could have done a lot worse than pick up nickel and copper assets. Will check the permitting status of each project but on the whole I'm quite content with this.

[masurenguy] 12/7/2022 07:50

US$185m copper and nickel royalty portfolio acquisition from South32

Reinforces position as the leading global royalty and streaming company focused on future-facing commodities

Anglo Pacific Group PLC has agreed to acquire a high-quality portfolio of royalties over advanced development stage copper and nickel projects from South32 Royalty Investments Pty Ltd ("South32") for a fixed consideration of US$185 million with further contingent consideration of up to US$15m. The transaction further reinforces Anglo Pacific's position as the leading royalty and streaming company focused on future-facing commodities that are critical to achieving the energy transition required to support a more sustainable world. The acquisition of this portfolio provides compelling growth and complements the Group's substantial weighting to income producing assets.

The initial consideration comprises a US$47.6m cash payment along with an US$82.4m share issuance on completion to South32, which will become a 16.9% shareholder in the enlarged business. In addition, the Company will make six quarterly cash payments totalling US$55m, to be paid in equal instalments over the next 18 months. These will be largely self-financed by cash flow generated from the Group's current asset portfolio. The Group has agreed with its lending syndicate to maintain the facility at US$150m without the previously scheduled US$25m facility step down which was due in August 2022. The Group has also agreed a US$50m accordion feature for future acquisitions.

[sporazene2] 12/7/2022 07:38

Material acquisition announced. Digesting this, initial view is that the scale of dilution is higher than I would have liked given cashflows not likely in the near term. Offset with strong/firm met coal pricing at kestrel. Would have preferred more of the price to have been deferred. on the flip side, seems to secure medium term revenues and with attractive commodities, so on balance content with the news.

[masurenguy] 09/7/2022 10:37

They call it the bellwether of the global economy, or “Doctor Copper.” So copper’s recent decline to a 16-month low is an ill wind. Simply put, demand is dropping and buyers are fearful of a coming recession. If raw materials prices are dropping, then there might be some wriggle room available for manufacturers to keep a lid on prices. Some, like Tesla, have already put prices up but others may be reassured to note that copper isn’t the only metal price that’s falling.

Nickel’s dropped around US$3.00 per pound over the past month, and aluminium’s down around 10%. Zinc, lead, cobalt, and tin are all also down. True, whilst aluminium’s trading at roughly the same level it was at a year ago, most of the other metals are still up on a 12 month basis. But it seems that fears of recession have put a stop to that upward momentum, just as the US Federal Reserve was hoping. Although the Fed wants to avoid recession, its widely agreed that for inflation to be brought under control, a serious reining in of the economy is required.

So, is it an accident that the copper price is at a 16-month low? The bull case for copper – that the electrification of the world continues apace – remains. Electric vehicles will continue to pull in unprecedented amounts of metal, and the gradual modernisation of developing world economies will consume huge amounts in construction and infrastructure. For now though, we’ve hit a bumpy patch in the road, and it isn’t clear how long it will last for.

[piedro] 08/7/2022 04:20

If ifs and ands were pots and pans (there'd be no work for tinkers' hands).

LOL

[cocopah] 07/7/2022 20:22

£4.50 … What are they smoking! I can just about see the £2.20 rating on this year‘s income and debt reduction if things go according to plan and commodity prices hold up.

#LLB I understand what you are saying but I think it’s a big call. We shall see, however I will be ecstatic if you are correct!😎

#The Deacon … thanks for the share it was interesting viewing however I noticed that there were only 96 views! You are bang on with your call about MBL needing to engage the analyst community. I do like his ‘visionary ESG focus’ but I think he could do more to sell the income performance when he discusses the company.🤷205;♂️

[the deacon] 07/7/2022 14:54

Interesting there's an increasing amount of analyst coverage in the US/Canada. That must be a target for Marc. There's still a much better understanding and acceptance of the benefits of royalty and streaming instruments in North America. I'm certain that'll help achieve a better multiple.

[the deacon] 07/7/2022 14:50

A Q&A with Marc and Alice https://youtu.be/MpI9qaZcX6A

[otemple3] 07/7/2022 14:34

Would love to see the Berenberg analysis, as whilst there has been some very positive changes here, £4.50 seems a stretch! Saying that, I'd be pretty happy with the BoA target being achieved given that is still close to 50% upside. Have to say I had no idea they even covered APF!

[laurence llewelyn binliner] 07/7/2022 14:30

Some interesting broker TP numbers coming out, and the disconnect between the current share price and fair value gets wider..

H1-2021 | net debt USD100M| income USD20M| share price 136 pence
FY-2021 | net debt USD90| income USD85M| share price 135 pence
H1-2022 | net debt cUSD25M| income USD75M| share price 138 pence
FY-2022 | cash positive / nil debt| income USD150M | share price ..?

We saw what happened to the share price on the run up to the Q1 results at 190p, now we will see what happens for Q2..

#Cocopops, to answer your question on how will we get to 250-300p+, if earnings are going to drop off in 2023, if you take out 2022 which will be an exceptional year for income earnings will grow YoY, through building out the portfolio and/or existing royalties contributing, the re-rating I believe will come as the share trades off a higher PE multiple along with Canadian piers..

[woodhawk] 07/7/2022 14:01

Bank of America cuts Anglo Pacific price target to 220 (230) pence - 'buy'

[bsdjj] 07/7/2022 12:53

Berenberg raised PT to 450p from 300p today. Punchy!

[cocopah] 07/7/2022 10:12

#LLB Apologies for my tenses in my post (no doubting what you are saying this year) but I am looking forwards from year-end when we will be cash positive. Of course by then there may be some announcement about future deals. In the meantime I guess we’ll just have to suck it up over the share price but as we go in to 2023 surely something needs to happen to drive the share price. I see cobalt is down another $5000 per ton today … and any downward pressure on the coal price next year would hurt even more. I guess what I’m trying to say is that I am struggling to find reasons to see how the £2, £2.40 and £3 valuations will happen … indeed we may be lucky to stay at the current share price. In its self that wouldn’t necessarily be a bad thing because the dividend for the current share price is acceptable but I was hoping for more (in terms of the share price) from the company.🤷205;♂️

[laurence llewelyn binliner] 07/7/2022 06:58

#Cocopops, we are not sat on excess cash that is devaluing, only USD15M operating cash at the last count, any surplus is smashing the debt down, the 2 deals we know about for 22/23 are funding the Piaui/Incoa additions USD75M, and 20M respectively..

Kestrel volumes from 2023 will be half, but with prices where they are income will be double and still above a normal year..

2022 income will be exceptional, paying for half of VB and all of Piaui/Incoa which is a fantastic result for us..

We could be looking at LIORC again soon and maybe adding there, or possibly picking up immediately accretive portfolio through MnA, longer term royalties taking a decade to bring on line probably less of a priority now but with mine finance at 8/10% and rising with rates it will bring along new royalty opportunities with it..

We did a share buyback in 2020 at c100p and are still sat on the treasury shares, smashing the debt out 1st leaves us in a much stronger position ready for any new additions..

[cocopah] 06/7/2022 23:01

The issue for me is that despite the debt going to zero soon, we aren’t rewarding shareholders through additional dividends (because of our new strategy) so the money just sits there depreciating whilst good value new deals are very difficult to come by … so what is the catalyst that will start to drive the share price upwards? Moreover the market sees that income will drop in 2023 & 2024. On top of this cobalt prices are declining and if the same happens to coal … 🤔🤔

Don’t get me wrong, I can get behind the new strategy but MBL needs to pull a deal out of the fire soon … or start a share buyback and retire them into treasury for deals later.🤷̴5;♂️

[laurence llewelyn binliner] 06/7/2022 17:39

#The Deacon, interesting to see Scotiabank with an opinion, we know we were looking for greater Canadian exposure where RS companies trade off far higher PE multiples.. :o)

APF 27.07.2021 H1 | net debt USD100M | income USD20M | share price 136 pence
APF H1-2022 | net debt cUSD25M | income USD75M | share price 138 pence..?

Just does not look fair value does it, very overweight IMO....

[the deacon] 06/7/2022 10:25

Scotiabank initiated yesterday with an outperform rating

[quepassa] 06/7/2022 10:23

140p again.



Given current market nervousness about a global recession, this share has further to fall.


ALL IMO. DYOR.
QP

[woodhawk] 06/7/2022 09:09

The share price was clearly overbought and the company's continued poor attitude to dividends was the final kicker for me. I'm glad I stuck to my guns and sold the lot near the top. I'm not really tempted again even now, except perhaps for a short term trade - but then there are so many other shares with better prospects and divis currently available at massive discounts, so seriously I doubt I will bother.