Anglo Pacific Share Discussion Threads

[the deacon] 14/7/2022 09:06

Yes, will await the DFS with interest. I'm sceptical on the timelines, but nevertheless APF is offering some excellent exposure to a basket of transitional energy metals. Undoubtedly plenty of value here.

[laurence llewelyn binliner] 14/7/2022 08:40

#The Deacon DFS underway and FID H2-2022 for West Musgrave, and another 1 for us to watch.. :o)

[masurenguy] 14/7/2022 08:36

"Analysts at BofA Securities reiterated their 'buy' rating for shares of Anglo Pacific Group, telling clients that its recent acquisition of four royalties from South32 reflected its pivot away from coal towards electrification metals. Anglo Pacific purchased the four royalties in copper and nickel on Tuesday for $200.0m, including contingent payments, an amount equivalent to half the company's market value.

Bank of America said it liked the transaction from a strategic point of view as the company pivoted towards so-called "future facing commodities", which include battery metals, copper, nickel, and cobalt. BofA added that after including the transaction and the group's royalty on Brazilian Nickel's Piaui project, its target price had increased from 220.0p to 230.0p, or one times' the value of its discounted cash flow-derived net present value. "Reiterate 'buy', we see rerating potential as APF executes on its strategy. We also see the royalty business model as defensive during periods of volatile prices and high cost inflation," said BofA.": Barclays

[the deacon] 13/7/2022 21:06

That's my only real concern with this deal. Santo Domingo looks like it'll be along the lines of APF's production estimate, but West Musgrave isn't a flagship asset for Oz Minerals as yet. It undoubtedly had the potential to be, but Oz don't seem in a hurry to develop it, and with its low grade/high tonnage characteristics it's largely reliant on attractive economics. Still some key permits to obtain too - though Australia isn't too worrisome on that front

[cyfran101] 13/7/2022 20:12

Great deal if it comes off. No investment decision by OZL so no guarantee that they will proceed over next few years, as expected.

[cocopah] 13/7/2022 17:05

Looks like we may have come out of the falling channel share price.😎€077;🏻

[masurenguy] 13/7/2022 08:26

Anglo Pacific is "a leader in future facing metals" thanks to latest deal

[podgyted] 12/7/2022 23:46

Lets see M.

Metal prices being slaughtered - green or not.

A buffer on this used to be the dividend, but, reading between the lines, that is going to be whittled away. I don't expect an increase in the foreseeable future and inflation will do its work.

[masurenguy] 12/7/2022 16:23

Positive market response to todays news. 😊

[cocopah] 12/7/2022 15:48

This morning‘s investor briefing for others who may have missed it …😎8077;🏻

hxxps://stream.brrmedia.co.uk/broadcast/62c7eb61d161177b45789ef3

[laurence llewelyn binliner] 12/7/2022 12:06

#Cocopops, pretty much yes, if we smash out the debt and USD47.6M to zero in 6 quarters, plus dividends but consider the Kestrel income (met coal prices dependant) should be at least that on its own..

APF Income USD10/11M per quarter + Kestrel

Q1-2022 - USD33.5M (Kestrel)
Q2-2022 - USD30.0M
Q3-2022 - new royalty tiers USD50M
Q4-2022 - new royalty tiers USD50M
Q1-2023 - 50% volumes with USD25M..?
Q2-2023 - 50% volumes with USD25M..?

Equity at 154p, debt done, portfolio growth and exciting times ahead... :o)

[cocopah] 12/7/2022 10:55

#LLB I understand the shares piece … just trying to get my head around the rest of it …

I thought net debt was forecast to be around $25m at the end of Q2 … then on today’s news there is the $47.6m cash payment (presumably this roughly equates to the $75m you mention above). On top of this there are the six quarterly payments totalling $55m (c$9m per quarter) and ongoing dividend payments of $4.5m per quarter (on the enlarged share base) … am I right in thinking we therefore need c$26m per quarter in net contribution for six quarters to wear this off (including making the divi pmt each quarter)?

[the deacon] 12/7/2022 10:35

They've used $3.45/lb copper and $8/lb nickel

[the deacon] 12/7/2022 10:34

Phillis, yes that's right. Nifty is a re-start, Carlota is at small scale production, but the two key assets (West Musgrave and Santo Domingo are expected to be in production over the next 2-3 years or so)

[laurence llewelyn binliner] 12/7/2022 10:22

43,622,091 new ordinary shares issued to South32 upon closing of the transaction at £1.54 per share, corresponding to a +6% premium to 30 day VWAP

Expected net debt of USD75M with leverage ratio 0.5 at closing, so debt of around USD90M, which we can smash out in 2023/24 from the Kestrel runoff income..

[cocopah] 12/7/2022 10:03

#The Deacon & #LLB I missed the investor call this morning, thank you for putting my mind at rest with respect to the dividend. We must be expecting a heck of a lot of income to support the six quarterly payments and the dividend (all this on an enlarged capital base).

No doubt all will become clear in due course.😎

[stemis] 12/7/2022 09:52

Did they say what metal prices they are assuming for the incomes they detail in the announcement?

[phillis] 12/7/2022 09:51

Is it the case that none of these mines are producing anything at the moment?

[laurence llewelyn binliner] 12/7/2022 09:40

Our route to a sustainable USD100M income ex Kestrel as that winds off in 25/26, just what we needed to get in the bag, well done to the team.. :o)

7p dividend intact..

[the deacon] 12/7/2022 09:26

MBL says the next transaction will be on a producing mine (investor call)

[the deacon] 12/7/2022 09:20

Personally I like the deal. The potential is $50m p/a by mid decade from just this portfolio. As Kevin just said, it backfills as Kestrel falls away. On top of that, these assets are copper and nickel sulphide deposits. Both absolutely key for the energy transition. A lot of less than enthusiastic responses here this morning, but imv this is exactly the sort of portfolio deal that APF needed. Flesh out the development pipeline with world class operations run by top tier operators. We can't ask for more than that..

[the deacon] 12/7/2022 09:15

Kevin just mentioned in the investor call that they're committed to the 7p dividend

[cocopah] 12/7/2022 09:05

Too early to know whether we have 'bought well' however the stabilisation of medium-term income of c$100m/annum appears positive and it's MLB doing what he said he would ... pursuing a growth strategy.

I can see the divi getting slashed though so might have to consider options as a divi investor and try to take any advantage offered by an increase in the share price ... which of course may or may not happen.

[stemis] 12/7/2022 09:02

Market rather underwhelmed by the deal which in the short term at least, is dilutive to earnings and negative for dividend increases.

As I said previously "I'm sceptical that building a war chest to buy further royalties at the current high level of commodity pricing is really in shareholders (as opposed to management empire building) interests".

[laurence llewelyn binliner] 12/7/2022 08:57

#The Deacon, as we predicted, another VB size deal, with growth through MnA and a great deal to digest there, but my 1st thoughts are +20% equity/MCAP, and the treasury shares bought at 101p sold at 154p, which pretty much covers the USD82.4M off for starters..

With the dividend maintained at 7 pence per share on the enlarged equity.. :o)