Final Results

Anglo Pacific Group PLC 28 February 2007 Anglo Pacific Group PLC Preliminary Results 2006 PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2006 Anglo Pacific Group PLC (APG), the natural resources royalties company, today announces record preliminary results for the year ended 31st December 2006. Financial Highlights • Cash and strategic investments increase by 93% to £77.2 million (2005: £39.9 million) • Realised profits from mature mining interests increased by 102% to £13.3 million (2005: £6.6 million) • Earnings increased by 34% to 19.12p per share (2005: 14.31p) • Proposed final dividend increased by 15% to 3.75p per share (2005: 3.25p) • Total dividend for the year increased by 15% to 6.35p (2005: 5.50p) • Profit before tax increased 30% to £22,109,000 (2005: £16,944,000) • Coal royalties for the year of £10.5 million (2005: £11.5 million) • Australian coal royalty independent valuation of £47.9 million Operational Highlights • Increased cash position • Major expansion and increase in values of uranium projects • Coking coal prices expected to remain buoyant • Progress with Core Resources in Australia • Coal tenancies in British Columbia increased • Access delays at Groundhog joint venture drilling Commenting on the Preliminary Results, Peter Boycott, Chairman of Anglo Pacific Group PLC said: '2006 has been another record year for Anglo Pacific Group. Strong royalty receipts and record realised profits from mining interests have enabled the Group to pay increased dividends to shareholders. The Group has increased its exposure to uranium, gold and base metals whilst maintaining a higher level of cash reserves than in previous years. The Group's strategy remains to expand its royalty interests organically or by acquisition. The Board expects the continuing expansion of the economies of China, India and the Far East to sustain demand for base metals, coking coal and energy products including uranium.' Enquiries: Brian Wides / Peter Boycott / Matthew Tack Anglo Pacific Group PLC 020 7318 6360 Stephen Scott / James Harris / James O'Shaughnessy Scott Harris 020 7653 0030 Website www.anglopacificgroup.com Anglo Pacific Group PLC Preliminary Results 2006 CHAIRMAN'S REVIEW In 2006 many metal prices and selected mining markets rose substantially due to the continued expansion of the world economy. Worldwide interest rates also rose steadily on account of increased inflation fears due to higher energy and commodity prices. In recent months, however, these pressures appear to be easing due to the decline in oil and some industrial metal prices, although these are still at historically high levels. The gold price has remained buoyant mainly due to currency worries, whilst the price of uranium has continued to rise to record levels reflecting supply shortages and concern about future energy sources. It is against this macroeconomic background that the Group in 2006 realised substantial profits on some of its mature mining interests whilst further increasing its exposure to uranium, base metals and gold. In Australia royalty receipts remained buoyant during the year. Realised capital gains for 2006 were a record £13.3 million whilst earnings of 19.12p and total dividends of 6.35p per share for the year were also at record levels. In addition to its royalty and other private coal interests, at 31st December 2006 the Group had over £77 million of cash and investments compared to £40 million a year ago and borrowings of £1 million six years ago. This overall performance reflects the Group's successful continuing active management of its mining interests. Strategy and Progress Anglo Pacific Group has three main components to its strategy :- • To expand its strategic mining interests to maximise shareholder value. • To expand its royalty interests by acquisition and by actively adding value to its mining projects. • To continue to pay a substantial proportion of its royalties as dividends to shareholders. Progress in achieving these goals is evidenced by the 15% increase in dividends and the 93% rise in the value of cash and other mining interests. Moreover, strategic stakes in the Group's main mining projects involve corporate support and influence that are intended to lead to a substantial share of the cashflow or royalties arising from future mining operations. The Group maintains its active, merchant banking approach to each project by providing specific business and financial support to management. This creates more opportunities within projects whilst at the same time reducing the risks associated with these mining ventures. Greater liquidity at the year end will enable the Group to take advantage of opportunities as they arise. The increased value of strategic stakes in companies such as Platinum Australia, Energy Metals Corporation, Omegacorp, Aquiline Resources and Indo Mines is compelling evidence of this supportive approach to mining projects. The London Stock Exchange now requires that quoted companies annually publish a schedule of all their worldwide market announcements relating to disclosable equity stakes. Almost all the Group's equity interests are listed on either the LSE, TSXV or ASX where initial equity stake disclosure levels are 3%, 10% and 5% respectively. For access to these announcements shareholders should refer to the Group's website at www.anglopacificgroup.com. Management The Group has taken significant steps during the year to strengthen its Board. Mr Matthew Tack was appointed Finance Director of the Company on 5th July 2006. Mr Tack is a Chartered Accountant (Australia) who joined the Company as Group Financial Controller in July 2004 and remains Group Company Secretary. Mr Michael Atkinson, a previous Chairman of British Coal, was appointed non-executive director on 9th February 2006. Both of these appointments are welcome and useful additions to the Board. Following these appointments, Mr Brian Wides has been appointed Chief Executive. Mr Henry Michaelis, who resigned for health reasons on 20th June 2005, died of cancer on 22nd October 2006 after a long illness. The Board wishes again to record the thanks it owes to Mr Michaelis for his hard work and major contribution to the development of the Group during the eight years that he was a member of the Board. Outlook The Board, whilst expecting steady royalty flows in 2007, is optimistic about the ability of its other strategic mining interests to produce further asset appreciation and potential new royalty flows. Finally, I wish to thank shareholders for their continued support, and the directors and staff for another record set of results. P.M. BOYCOTT Chairman 28th February 2007 CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2006 2006 2005 £'000 £'000 Royalty income 10,472 11,479 Other operating income 266 91 Profit on sale of mining and exploration interests 13,322 6,626 Finance income 232 188 -------- -------- 24,292 18,384 -------- -------- Net operating expenses (2,183) (1,440) -------- -------- Profit before tax 22,109 16,944 Tax (2,811) (3,078) -------- -------- Profit attributable to equity holders 19,298 13,866 ======== ======== Basic earnings per share 19.12p 14.31p -------- -------- Fully diluted earnings per share 19.11p 14.21p -------- -------- Turnover and profit before tax are derived from the Group's continuing operations. CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2006 2006 2005 £'000 £'000 Non-current assets Property plant and equipment 838 847 Coal royalties 47,868 56,715 Mining and exploration interests 67,317 34,135 -------- -------- 116,023 91,697 Current assets Trade and other receivables 1,834 2,548 Cash at bank 9,836 5,797 -------- -------- 11,670 8,345 -------- -------- Total assets 127,693 100,042 ======== ======== Current liabilities Taxation 1,414 1,386 Trade and other payables 255 595 -------- -------- 1,669 1,981 Non-current liabilities Deferred tax 12,798 13,713 -------- -------- 12,798 13,713 -------- -------- Total liabilities 14,467 15,694 -------- -------- Capital and reserves attributable to shareholders Share capital 2,032 2,005 Share premium 12,112 11,338 Coal royalty revaluation reserve 33,879 42,017 Investment revaluation reserve 28,785 5,505 Share based payment reserve 27 12 Foreign currency translation reserve (381) 478 Special reserve 632 632 Retained Earnings 36,140 22,361 -------- -------- 113,226 84,348 -------- -------- Total equity and liabilities 127,693 100,042 ======== ======== CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE TWO YEARS ENDED 31 DECEMBER 2006 Share Share Coal Investment Share Foreign Special Retained Total capital premium royalty revaluation based currency reserve earnings equity revaluation reserve payment translation reserve reserve reserve £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 ----------------------------------------------------------------------------------------------------------------------- Balance at 1st January 2005 1,891 4,741 42,964 7,805 2 164 632 11,910 70,109 Changes in equity for 2005 Coal Royalties: Royalties valuation movement taken to equity - - (933) - - - - - (933) Deferred tax on valuation - - (14) - - - - - (14) Available-for-sale investments: Valuation movement taken to equity - - - 879 - 154 - - 1,033 Transferred to income statement on disposal - - - (3,179) - - - - (3,179) Foreign currency translation - - - - - 160 - - 160 ---------------------------------------------------------------------------------------------- Net expense recognised direct into equity - - (947) (2,300) - 314 - - (2,933) Profit for the period - - - - - - - 13,866 13,866 ---------------------------------------------------------------------------------------------- Total recognised income and expenses - - (947) (2,300) - 314 - 13,866 10,933 Dividends - - - - - - - (3,415) (3,415) Issue of share capital 94 5,640 - - - - - - 5,734 Scrip Dividend 20 957 - - - - - - 977 Equity share options issued - - - - 10 - - - 10 ---------------------------------------------------------------------------------------------- Balance at 1st January 2006 2,005 11,338 42,017 5,505 12 478 632 22,361 84,348 ---------------------------------------------------------------------------------------------- Changes in equity for 2006 Coal Royalties: Royalties valuation movement taken to equity - - (8,847) - - - - - (8,847) Deferred tax on valuation - - 709 - - - - - 709 Available-for-sale investments: Valuation movement taken to equity - - - 28,349 - (575) - - 27,774 Transferred to income statement on disposal - - - (5,069) - - - - (5,069) Foreign currency translation - - - - - (284) - - (284) ---------------------------------------------------------------------------------------------- Net income recognised direct into equity - - (8,138) 23,280 - (859) - - 14,283 Profit for the period - - - - - - - 19,298 19,298 ---------------------------------------------------------------------------------------------- Total recognised income and expenses - - (8,138) 23,280 - (859) - 19,298 33,581 Dividends - - - - - - - (5,519) (5,519) Scrip Dividend 9 580 - - - - - - 589 Issue of share capital on exercise of options 18 194 - - - - - - 212 Equity share options issued - - - - 15 - - - 15 ---------------------------------------------------------------------------------------------- Balance at 31st December 2006 2,032 12,112 33,879 28,785 27 (381) 632 36,140 113,226 ============================================================================================== CONSOLIDATED CASH FLOW STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2006 Group 2006 2005 £'000 £'000 Cashflows from operating activities Profit before taxation 22,109 16,944 Adjustments for: Interest received (232) (188) Unrealised foreign currency (gain) / loss (284) 160 Depreciation of property, plant and equipment 10 9 (Gain) on disposal of mining and exploration interests (13,322) (6,626) Share based payments 15 10 -------- -------- 8,296 10,309 Decrease / (Increase) in trade and other receivables 715 (406) (Decrease) / Increase in trade and other payables (340) 166 -------- -------- Cash generated from operations 8,671 10,069 Income taxes paid (2,990) (1,738) -------- -------- Net cash from operating activities 5,681 8,331 -------- -------- Cash flows from investing activities Proceeds on disposal of mining and exploration interests 30,024 11,276 Purchase of mining and exploration interests (27,180) (20,744) Interest received 232 188 -------- -------- Net cash used in investing activities 3,076 (9,280) -------- -------- Cash flows from financing activities Proceeds from issue of share capital 212 5,734 Dividends paid (4,930) (2,440) -------- -------- Net cash used in financing activities (4,718) 3,294 -------- -------- Net increase in cash and cash equivalents 4,039 2,345 Cash and cash equivalents at beginning of period 5,797 3,452 -------- -------- Cash and cash equivalents at end of period 9,836 5,797 ======== ======== NOTES 1. Earnings per ordinary share is calculated on the Group's profit after tax of £19,298,000 (2005: £13,866,000) and the weighted average number of shares in issue during the year of 100,949,018 (2005: 96,892,627). The diluted earnings per ordinary share is calculated on a profit after tax of £19,298,000 (2005: £13,866,000) and 100,963,278 shares (2005: 97,612,472). The dilutive effect is due to options outstanding under the Employee Share Option Scheme at the year end. 2. The above figures do not constitute full accounts within the meaning of Section 240 of the Companies Act 1985. The figures for the year ended 31st December 2005 constitute abridged accounts extracted from the published accounts for the year which have been filed with the Registrar of Companies and on which the auditors' report was unqualified and did not contain a statement under Section 237(2) or (3) of the Companies Act 1985. The audit opinion on the accounts for the year ended 31 December 2006 has not yet been signed. This information is provided by RNS The company news service from the London Stock Exchange

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