Anglo Pacific Share Discussion Threads

[laurence llewelyn binliner] 28/7/2022 08:33

H2-2022 earnings will take care of all the S32 (6*9M) payments and the dividend payout.., or 100% of the debt remaining, or half of both.. :o)

#Cocopops, near term share price is hard to predict, we saw 192p before the Q1 results, and the Q2 income is better so it would make sense to expect higher, but with the current macro not much is making sense right now so best to concentrate on the dividends, and the growth of the company which will over time re-rate to better reflect its value..

EV will continue to go up as the debt winds off, the company is becoming more valuable whether the share price reflects it or not..

But, we are through a half BN USD MCAP now..

[cocopah] 28/7/2022 07:41

Excellent results as expected!👏🏻👏7995;👏ӿ95; Given that the signposted results for the next 18 months are obviously going to be somewhat lower, what does everybody think the outlook is for the share price over the next 12 to 18 months? The enterprise value is obviously growing significantly, however income will fall in the short to medium term. Definitely an interesting ride!🤔

[johnrxx99] 28/7/2022 07:32

Updated.

Nice update - thanks Mas.

[masurenguy] 28/7/2022 07:12

Tremendous first half !

Half Year Trading Update

This update is ahead of the release of the full Group audited half year results on 24 August 2022.

Highlights:

-- Record portfolio contribution of $49.2m in Q2 2022, (Q2 2021: $13.6m), a fourth consecutive quarterly record - 13% higher than the previous record of $43.6m in Q1 2022.

-- $92.8m total portfolio contribution for H1 2022, surpassing the $85.6m generated in FY 2021 as a whole.

-- Results have benefitted from consistent volumes and very strong commodity prices during the first half of the year.

-- Q2 2022 expected to be the strongest quarter of the year, with commodity prices trading off thus far in H2 2022 and the gradual step down in Kestrel volumes likely to commence at the end of the year.

-- Queensland Government's increase to the statutory royalty rate regime applicable to the Group's Kestrel royalty entitlement effective as of 1 July 2022 and expected to partially offset lower coking coal prices during H2 2022.

-- $185m acquisition of an advanced development stage copper and nickel royalty portfolio from South32, largely financed from record portfolio contribution and designed to replace Kestrel mid-decade.

-- Brazilian Nickel PLC announced on 5 July 2022 the commencement of production from the small scale PNP1000 plant at the Piauí Nickel Project in Brazil where Anglo Pacific holds a 1.25% royalty on the project.

-- Agreed with lending syndicate to maintain the Group's revolving credit facility at $150m whilst adding a $50m accordion feature for future acquisitions.

-- Net debt at 30 June 2022 was $21m. Pro-forma net debt at 30 July 2022 post completion of the South32 transaction, is estimated to be $55m.

-- $145m+ of liquidity available to finance further growth opportunities, along with residual $20m LIORC stake.

Marc Bishop Lafleche, Chief Executive Officer of the Company, commented:"The portfolio continued to generate record levels of income during Q2, and along with the contribution from Q1 provided $93m of revenue, which in large part has been recycled into the acquisition of a high-quality royalty portfolio from South32. These record levels of income are not expected to be sustained in the second half of the year as commodity prices have pulled back, although the increase in the Queensland royalty rates will offset some of the impact of lower coking coal prices at Kestrel. The recent volatility in commodity prices across the board may also present opportunities for us to pursue further value-enhancing acquisitions and with over $160m of firepower we remain well capitalised to transact."

[laurence llewelyn binliner] 28/7/2022 07:12

Results out, and they should raise quite a few smiles, stronger than Q1, not weaker..Net debt pre S32 of USD20MNet debt post S32 of USD55MH1-2022 higher than FY2021..Should be an interesting ride today and from here on in... :o)

[laurence llewelyn binliner] 20/7/2022 19:50

#Cocopops, the dividend is 7 pence a year, and that is what we will get, S32 would not have accepted 43M shares thinking they would lose out on dividend income.. :o)

Our portfolio generates roughly USD10M income per quarter + Kestrel
We need to find USD15M per quarter to cover the six S32 payments and the quarterly dividends, Q2 income from Kestrel will take care of 2 quarters on its own..

Met coal has dropped off some, but still AUD250/tonne and in the 20/30% royalty bands from July 01st..

Our Q2 update tomorrow 28th, see where we are/were on debt/net debt..

[cocopah] 20/7/2022 19:30

Not sure what everybody thought about the presentation and Q&A (mine was the dividend question btw). Some random thoughts ...

- Specifically Q4 2022 divi not confirmed (either up, down or the same), not sure why (although the ongoing 7p per annum was committed to in general)?

- board seat award to South32 ... I wonder what this might result in (influence wise)?

- recent drop in coal prices (if sustained) will not trigger the Queeensland additional ramp-up ... could this make for a 'difficult' liquidity position in 2023?

- potash mentioned ... Khismet EML perhaps?

- graphite ... ACP perhaps?

- do we need a producing royalty asap as recent acquisition highly skewed vis a vie risks to development?

[johnrxx99] 20/7/2022 07:42

I'll update the details when the company website has been amended.

[laurence llewelyn binliner] 20/7/2022 07:22

#Sammu, yes S32 investments is wholly owned, so it is an all in 1 share mining including the R/S business..

Good to see the transaction completed yesterday, and confirmation of the treasury shares still held, with our IMC presentation today at 2pm..

261,732,553 total number of shares of the Company in issue
3,876,396 ordinary shares are held in treasury
257,856,157 total number of voting shares in the Company
USD21.5M needed to cover the dividend at 7p once

Q2 update next.. :o)

[1knocker] 20/7/2022 02:02

Thanks. I saw that Glencore had bought the coal operation for a knock down price. I was happy with that, as I hold Glencore!

[sammu] 20/7/2022 01:38

I have some S32. The subsidiary is wholly owned I think. They are also lse listed. They have done well with what they have. Spun out of bhp some years ago. They have exited energy coal with familiarly poor timing, but they have otherwise managed an interesting pot of diverse assets and have been expanding into attractive T1 battery plays.

[laurence llewelyn binliner] 19/7/2022 19:08

#1knocker, I looked into this yesterday, S32 is a TSX/ASX listed mining company, but the royalty business, S32 investments pty, so far as I could see is a private limited company with no listing..

[1knocker] 19/7/2022 18:16

Do any posters here hold South32, and if so how do they rate it as investment going forward?

[laurence llewelyn binliner] 19/7/2022 08:45

#Masurenguy, a dangerous position to get into IMO, with China now controlling so much of the reserve asset base globally now, specifically using cheap debt secured by assets they really want as leverage over minerals, with ownership comes monopolies and influence, often leading to ransom..

Not so far away from where we are now with O/G and European dependencies on Russia, look what is happening there when someone turns the taps down or off..

Energy crises and cold wars can turn into hot wars, the Donald was wrong on many things, but he was spot on there, saw that coming and warned against it..

Example, Sri Lanka, now bankrupt, swamped with cheap Chinese debt secured against the countries assets..

Sri Lanka is well-endowed with industrial minerals including Graphite, Ilmenite, Rutile, Zircon, Quartz, Feldspar, Clay, Kaolin, Apatite (Phosphate Rock), Silica Sand, Garnet sand, Mica, Calcite and Dolomite.

Pulmoddai beach sand deposit is the most important non-ferrous mineral reserve in Sri Lanka to date. This deposit contains minerals including one of the most expensive and sought after metals in the world - titanium..

[laurence llewelyn binliner] 19/7/2022 07:33

#Cocopops, Cobalt is softening some, along with most of our commodity basket, prices are notoriously volatile, but demand is not going anywhere as the EV agenda scales up and is underpinned by steel making too, we just have to ride the peaks and troughs and get an average over a year or 5 years..Extreme highs trigger uptick payments too, so we stay out of those zones on some commodities..Looking forward to our Q2/H1 updates coming, earnings will be very robust for sure, USD75-80M..See what that does for the share price . :o)

[cocopah] 19/7/2022 07:22

#Dartboard1 good to know, I see that cobalt took a smacking from £60k to £50k from 14/7 to 18/7 … perhaps this will reverse the tide.🤷‍;♂️

[dartboard1] 18/7/2022 12:33

CMOC in Congo have suspended all cobalt exports as of yesterday...the mine was 10percent of global output in 2021...

[laurence llewelyn binliner] 17/7/2022 14:25

#Sporazene2 thanks and added, also interesting to find we still own the 5M treasury shares too as we raised the max 20% main market listing amount.. :o)

On debt, we should be -USD25M net debt at H1 (40M total)
Post S32 deal we will be around -USD72.5M net debt (-87.5M total)
6 quarterly payments of 9M from paid for Kestrel income
USD5M per quarter for dividend payments

South32 Limited made a divestment in 2020 and took a 19.7% stake in Elemental royalties, they had 40 royalties left in their portfolio at the time, now 36 for us to consider going forward and look a great fit company to partner with..

[sporazene2] 17/7/2022 11:52

#llb. Investor presentation also scheduled for 20/7

[laurence llewelyn binliner] 16/7/2022 12:02

#Cocopops, from the T/A support line on my chart, we did drop below it but only for a day, then the latest deal news landed and we are back above it, there is much share price headroom here now and as the news sinks in a rerating towards a Canadian PE multiple would see us somewhere near the broker note targets..

Investor presentation 20.07.2022
H1 trading update 28.07.2021
H1 financials update 20.08.2021

VB acquisition +20% share issue to 213M
S32 acquisition +20% share issue, expected to close in the second half of July 2022.
USD 82.4M to be satisfied through the Company issuing 43,622,091 new ordinary shares
256M shares going forward, closing in on a 0.5BN USD MCAP..

[cocopah] 15/7/2022 19:14

#The Deacon … also now above the 200 day moving average for the share price too. That should add a bit of momentum as should the realisation that medium term income should be better than expected.

[the deacon] 15/7/2022 15:50

An excellent environment for the royalty and streamers to take advantage. Banks and other debt providers less than willing to finance projects right now. Companies not keen on issuing equity at relatively depressed share prices. Royalty and streaming deals will look the most attractive from a plc and shareholder register point of view.

[masurenguy] 15/7/2022 15:29

"Copper is down 35% from a record high set just four months ago when metals were soaring on concerns about supply in the wake of Russia’s invasion of Ukraine at a time when consumption remained hot. Goldman Sachs Group Inc. this week forecast copper to trade at $6,700 in the next three months, a 22% downgrade from its previous outlook. Sinking metals prices are also putting mining companies under pressure. Shares of copper producer Freeport-McMoRan Inc. have slid 40% this year, while Rio Tinto, BHP Group and Glencore have dropped in recent weeks. Goldman Sachs warned that rising costs are making about 300,000 tons of global copper-mine capacity unprofitable. Capacity that was profitable at $6,270 a ton a year ago now won’t make money at $7,500." Bloomberg