Interim Results for the Three Months Ended Marc...
FOR: ANGLO PACIFIC GROUP PLC
LSE SYMBOL: APF
TSX SYMBOL: APY
May 15, 2012
Interim Results for the Three Months Ended March 31, 2012
LONDON, UNITED KINGDOM--(Marketwire - May 15, 2012) - Anglo Pacific Group PLC ('Anglo Pacific', the 'Company', the
'Group') (LSE:APF)(TSX:APY) is pleased to announce interim results for the three months ended March 31, 2012. The Group
has published both the unaudited financial statements and the Management's Discussion and Analysis, and these, together
with this release, are available on both the Group's website at www.anglopacificgroup.com and on SEDAR at www.SEDAR.com.
Highlights:
-- Royalty income for the quarter of GBP 1.5 million (GBP 9.9 million for
Q1 2011)
-- Royalty cash flow per share for the three months ended March 31, 2012 of
1.80p (9.21p for the comparable period in 2011)
-- Strong cash position at March 31, 2012 of GBP 20.9 million (GBP 32.2
million at December 31, 2011), with no borrowings or hedging
-- Completion of the Mount Ida iron ore royalty acquisition in May,
following announcement of the proposed transaction in February
-- Total assets of GBP 366.0 million at March 31, 2012 (GBP 380.2 million
at December 31, 2011)
Peter Boycott, Chairman of Anglo Pacific, commented:
"The Company continues to receive an increasing number of new enquiries for mining finance, which are being assessed as
potential royalty opportunities. We have made further progress towards building and strengthening our royalty portfolio
through the recently completed acquisition of the iron ore royalty at Mount Ida, in Australia.
During the period, royalty flows from Kestrel in Australia were lower compared to the same period last year: this was
due to bad weather and a protracted longwall changeover impacting the level of coal produced. As seen previously, with
longwall changeovers, we are confident that the shortfall in output from the period will be made up at a later stage.
We have seen the valuation of our assets remain broadly similar to that at the year end, despite recent declines in
mining markets. The current difficult debt and equity markets have created increased royalty opportunities for the
Group. With our strong balance sheet, we are well placed to target these opportunities and further develop our royalty
portfolio.
Anglo Pacific's strategy remains focused on paying a progressive dividend and acquiring new royalty cash flows from
commodities linked to Asian growth."
Conference call:
There will be a conference call for analysts on May 15, 2012 at 9:30am (BST). The dial-in details are as follows:
Participant dial in number: +44 (0)20 8515-2306 / 4538578 (confirmation code). A replay of the analysts' conference call
will be available at www.anglopacificgroup.com.
The full text of both the financial statements and the Management's Discussion and Analysis may also be obtained by
following the following links in this press release:
Financial Statements: http://www.anglopacificgroup.com/i/pdf/310312Q1Financials.pdf.
Management's Discussion and Analysis: http://www.anglopacificgroup.com/i/pdf/310312Q1MDA.pdf.
Notes to editors:
Anglo Pacific Group PLC is a global natural resources royalties company. The strategy of the Group is to expand its
mineral royalty interests in long-life mining assets. The Group achieves this through both direct acquisition and
investment in projects at the development and production stage. It is a continuing policy of the Group to pay a
substantial proportion of these royalties to shareholders as dividends.
Royalties explained:
A royalty is an entitlement to an agreed percentage of a project's sales revenue, without any liability for production
costs or capital expenditure. This is the key benefit of owning a royalty.
In the mining industry, most royalties endure for the life of the resource and are paid on a regular basis. Historically
there have been different terms for royalties including Gross Revenue or Net Smelter Return ("GRR" or "NSR") royalties,
which are both based on the gross sales value of the actual mineral. Our model is based around GRR or NSR royalties as
they provide the best and clearest return.
Acquiring existing royalties
In this case we buy existing royalty agreements, such as those owned by exploration companies who may have retained a
residual royalty in a mine they helped discover. Royalty companies rarely sell their royalties, once acquired.
Creating new royalties
Our new royalty agreements tend to come from providing financing for mining operations, usually to help progress a mine
into production.
Acquisitions
On May 1, 2012, the Group completed the first tranche of the previously announced acquisition of a 50% interest in the
1.5% GRR over the Mount Ida iron ore project in Australia, from Red Rock Resources PLC. The Royalty Sale Agreement
provides for a total of US$14 million being paid in three instalments as follows:
-- Tranche 1: US$6 million on completion and agreement of the terms of the
transaction, for a 0.3% GRR;
-- Tranche 2: US$4 million payment for a further 0.225% GRR following the
results of a positive definitive feasibility study ("DFS"), a formal
decision to mine and 20% of the pre-production capital costs outlined in
the DFS being provided for; and
-- Tranche 3: US$4 million for a further 0.225% GRR following the
commencement of commercial production, taking the total to a 0.75% GRR.
Tranche 1 was completed with the payment of US$6 million being settled by US$3.9 million in cash and the issue and
allotment of 416,161 ordinary shares in the capital of the Company to Red Rock. This acquisition is consistent with the
Group's focus on commodities leveraged to the continuing growth in Asia and other developing regions.
The Group continues to evaluate a number of opportunities to acquire or create more royalties, targeting three to four
new royalties a year, in order to further diversify and increase the Group's revenue stream.
Royalty portfolio
The performance of the Group's portfolio of producing royalties was impacted by lower hard coking coal prices and a
short-term fall in sales volumes at Kestrel during the quarter ended March 31, 2012. The El Valle-Boinas/Carles gold and
copper mine continues its build up to full production, whilst production from the Amapa iron ore mine was as expected.
Kestrel
During the first quarter, production volumes were impacted by a scheduled longwall changeover and lower productivity
during the ramp-up, as well as adverse weather conditions. Production of hard coking coal at Kestrel for the first
quarter was 365,000 tonnes (including production outside of the Group's private royalty area) compared to 968,000 tonnes
in the first quarter of 2011. Higher production at Kestrel is expected during the rest of the year. Hard coking coal
prices remained under pressure during the quarter due to uncertainty surrounding world economic growth with April
contract prices between $210 and $225 per tonne compared to $330 per tonne in April 2011.
The combination of these factors resulted in royalty income from Kestrel of GBP 1.1 million (A$1.6 million) based on a
50% share of invoiced volume of 234,000 tonnes for the quarter, compared to GBP 5.6 million (A$8.9 million) on an
invoiced volume of 997,000 tonnes for the comparable period in 2011.
The independent valuation of the Kestrel royalty at March 31, 2012 was GBP 166.6 million (A$257.8 million) compared to
GBP 175.1 million (A$265.9 million) at December 31, 2011. This reduction in the valuation is largely due to the
weakening of the Australian dollar relative to sterling.
Crinum
The Group received GBP 0.1 million (A$0.2 million) in royalties during the quarter ended March 31, 2012, largely due to
remnant mining on the private royalty ground. The Crinum longwall had largely left the Group's private royalty ground
during the quarter ended December 31, 2011. In the Group's coal royalty valuation future production from Crinum
continues to be difficult to evaluate and as a result is ascribed no value.
Amapa
Royalty receipts for the quarter ended March 31, 2012 were GBP 0.4 million (GBP 0.5 million for Q1 2011). Continued
strong iron ore contract pricing provides the Group with confidence in the future revenues from this royalty.
El Valle-Boinas/Carles
The Group received GBP 0.3 million in royalties during the quarter ended March 31, 2012, relating to the Q4 2011
production of 4,499 ounces of gold, 17,880 ounces of silver and 727,525 pounds of copper at the El Valle-Boinas/Carles
("EVBC") gold and copper mine.
Production at the mine remained on target during the quarter ended March 31, 2012 with 10,928 ounces of gold, 33,051
ounces of silver and 965,000 pounds of copper. The Group's royalty receipts from Q1 production will be received during
the quarter ended June 30, 2012.
The royalty receipts from EVBC are currently repayment of principal and are applied against the debenture instrument.
They are not included in the income statement but are included in the receipts from royalty instruments in the cash flow
statement.
Financial performance
Group royalty revenue for the three months ended March 31, 2012 decreased to GBP 1.6 million compared to GBP 9.9 million
for the first three months of 2011. Despite increased cash flows from the Group's royalty debentures, when combined with
the reduction in cash flows from the Group's coal royalties, the Group's royalty cash flow per share decreased to 1.80p
per share for the quarter compared with 9.21p per share for the three months ended March 31, 2011.
The Group's operating expenses increased from GBP 0.5 million in the first three months of 2011 to GBP 0.9 million in
the three months to March 31, 2012. This change was largely due to increased external legal fees incurred in assessing
royalty opportunities and managing our existing royalties. In addition, the Group's employee benefit expenses increased
by GBP 0.1 million for the three months ended March 31, 2012, compared to the same period in 2011 following the
appointment of additional staff, including the Group's new Chief Financial Officer.
Gains on disposal during the three months to March 31, 2012 were GBP 0.6 million, compared to GBP 4.4 million realised
during the comparable period in 2011.
The Group realised a net foreign exchange loss in the three months to March 31, 2012 of GBP 1.2 million, compared to a
net foreign exchange loss of GBP 0.7 million in the comparable period of 2011, as a result of weakening in both the
Australian and Canadian currencies relative to sterling. Management continue to examine ways of reducing potential
foreign exchange risks and minimise exchange rate related fluctuations in the Group's financial performance and
position.
Income tax expense for the three months ended March 31, 2012 was GBP 0.2 million, compared to GBP 2.7 million for the
three months ended March 31, 2011.
Overall the Group's operating profit before tax for the three months ended March 31, 2012 was GBP 0.7million compared to
GBP 9.4 million for the three months ended March 31, 2011. Group earnings per share for the three months ended March 31,
2012 were 0.19p compared to 9.72p for the first three months of 2011.
Financial position
Total assets of GBP 366.0 million at March 31, 2012 compared to GBP 380.2 million at December 31, 2011.
At March 31, 2012, the Group's Australian coal royalty interests have been independently valued at GBP 166.6 million
compared to GBP 175.1 million at December 31, 2011. The change was primarily due to the weakening of the Australian
dollar relative to sterling. The Group's royalty instruments following fair value adjustments were valued at GBP 23.6
million at March 31, 2012 compared to GBP 24.7 million at December 31, 2011. This decrease is due to adjustments to
future foreign exchange and commodity price assumptions.
The total amortised cost of royalties treated as intangibles was GBP 67.6 million at March 31, 2012, compared to GBP
68.3 million at December 31, 2011. The decrease is due to the continued amortisation of the Amapa royalty.
Royalty Royalty Royalty
Coal royalties Instruments Intangibles Options Total
GBP '000 GBP '000 GBP '000 GBP '000 GBP '000
March 31, 2012
Number 2 4 9 4 19
Amortised cost 196 12,493 67,596 728 81,013
Valuation 166,605 23,552 115,656 728 306,541
Royalty Royalty Royalty
Coal royalties Instruments Intangibles Options Total
GBP '000 GBP '000 GBP '000 GBP '000 GBP '000
December 31, 2011
Number 2 4 9 4 19
Amortised cost 196 12,493 68,334 728 81,751
Valuation 175,124 24,736 120,485 728 321,073
For further information on royalty instruments and intangibles please refer to note 2 below.
At March 31, 2012, the Group's quoted and unquoted equity investments, including royalty options, were valued at GBP
82.5 million compared to GBP 64.6 million at December 31, 2011. The private equity interests and royalty options remain
accounted for at cost. The increase in the market value of the Group's quoted and unquoted equity interests was
primarily a result of a number of acquisitions made during the quarter, where the Group's Executive Committee deemed a
royalty opportunity was possible.
At March 31, 2012, the Group had cash of GBP 20.9 million compared to GBP 32.2 million at December 31, 2011, with no
borrowings or hedging. Combined with royalty and trade receivables, the Group's total cash and receivables at March 31,
2012 was GBP 22.8 million compared to GBP 44.5 million at December 31, 2011. This reduction was due to the lower
production at Kestrel and the corresponding reduction in royalty receivables, together with the additional investment in
mining and exploration interests.
The Group has limited capital expenditure requirements other than for the acquisition of additional royalties.
Management believe that the Group's current cash resources and future cash flows from continuing royalty revenues will
be sufficient to cover the cost of general and administrative expenses, income taxes and dividend payments. Management
also believe that the Group has sufficient capital and working capital resources to continue to deliver its strategy of
acquiring new royalties.
The Group remains debt free and its liquid resources are held in a spread of currencies and financial institutions. The
Group's mining interests and royalty revenues are mainly denominated in Australian and Canadian dollars.
The book value of the Group's total assets at March 31, 2012 was GBP 366.0 million compared to GBP 380.2 million at
December 31, 2011. As at the period end, this does not include any increase in value over cost that may be attributable
to the Group's Panorama and Trefi coal projects and royalty intangibles.
Outlook
The Group's royalty cash flows during the year will be boosted by the continued ramp up of production at the El Valle-
Boinas/Carles gold mine in Spain and a return to normal coking coal output at Kestrel in Queensland.
The recent acquisition of the Mount Ida iron ore royalty enhances our exposure to steel related commodity projects
geared to Asian growth, which the Group believes will continue to drive commodity prices in the long term. The Group now
holds a number of high quality, long life assets with the potential for significant returns.
The current difficult debt and equity markets have made the raising of mining finance much more challenging, thus
creating increased royalty opportunities for the Group. The Group is well placed with its strong balance sheet to target
these opportunities and further develop its royalty portfolio and potential future revenue streams.
Anglo Pacific Group PLC
CONSOLIDATED INCOME STATEMENT (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 2012
------------------------------------------------------------------------
Three months ended
March 31, 2012 March 31, 2011
GBP '000 GBP '000
Royalty income 1,551 9,874
Finance income 287 322
Amortisation of royalties (254) (254)
Operating expenses (919) (504)
--------------- ---------------
Operating profit 665 9,438
Gain on sale of mining and
exploration interests 647 4,427
Other income 292 222
Other losses (1,159) (826)
--------------- ---------------
Profit before tax 445 13,261
Income tax expense (242) (2,688)
--------------- ---------------
Profit attributable to equity holders 203 10,573
--------------- ---------------
--------------- ---------------
Total and continuing earnings per
share
Basic earnings per share 0.19p 9.72p
Diluted earnings per share 0.19p 9.72p
The results for the three months ended March 31, 2012 and 2011 have neither been audited nor reviewed by the Group's
auditors.
Anglo Pacific Group PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 2012
----------------------------------------------------------------------------
Three months ended
March 31, 2012 March 31, 2011
GBP '000 GBP '000
Profit for the financial period 203 10,573
Other comprehensive income
Net (loss)/gain on revaluation of
coal royalties (5,271) 23,613
Net gain/(loss) on revaluation of
available for sale investments 521 (12,247)
Net exchange loss on translation of
foreign operations (3,094) (3,602)
Deferred tax 2,220 (6,369)
----------------- -----------------
Net (expense)/income recognised
directly in equity (5,421) 11,968
----------------- -----------------
Reclassification and adjustment on
disposal of available for sale
investments (290) (3,680)
----------------- -----------------
Total transferred from equity (290) (3,680)
----------------- -----------------
Total comprehensive (expense)/ income
for the financial period (5,711) 8,288
----------------- -----------------
----------------- -----------------
The results for the three months ended March 31, 2012 and 2011 have neither been audited nor reviewed by the Group's
auditors.
Anglo Pacific Group PLC
CONSOLIDATED BALANCE SHEET (UNAUDITED) AS AT MARCH 31, 2012
-------------------------------------------------------------------------
Unaudited Unaudited Audited
March 31, March 31, December 31,
2012 2011 2011
GBP '000 GBP '000 GBP '000
-------------- -------------- --------------
Non-current assets
Property, plant and
equipment 2,130 2,165 2,152
Coal royalties 166,605 197,393 175,124
Royalty instruments 23,552 27,927 24,736
Intangibles 68,424 42,482 69,138
Mining and exploration
interests 82,450 122,685 64,551
-------------- -------------- --------------
343,161 392,652 335,701
Current assets
Trade and other receivables 1,926 11,203 12,298
Cash and cash equivalents 20,913 22,491 32,197
-------------- -------------- --------------
22,839 33,694 44,495
-------------- -------------- --------------
Total assets 366,000 426,346 380,196
-------------- -------------- --------------
-------------- -------------- --------------
Non-current liabilities
Deferred tax 54,023 70,666 58,822
-------------- -------------- --------------
54,023 70,666 58,822
Current liabilities
Income tax liabilities 4,693 4,389 3,731
Trade and other payables 696 536 781
-------------- -------------- --------------
5,389 4,925 4,512
-------------- -------------- --------------
Total liabilities 59,412 75,591 63,334
-------------- -------------- --------------
Capital and reserves
attributable to
shareholders
Share capital 2,184 2,183 2,184
Share premium 25,539 25,361 25,539
Coal royalty revaluation
reserve 82,979 105,205 86,669
Investment revaluation
reserve (4,934) 35,799 (4,843)
Share based payment reserve 215 65 177
Foreign currency translation
reserve 39,507 37,060 41,640
Special reserve 632 632 632
Investment in own shares (2,601) (2,421) (2,601)
Retained earnings 163,067 146,871 167,465
-------------- -------------- --------------
Total equity 306,588 350,755 316,862
-------------- -------------- --------------
Total equity and liabilities 366,000 426,346 380,196
-------------- -------------- --------------
-------------- -------------- --------------
Anglo Pacific Group PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED) FOR THE FIFTEEN
MONTHS ENDED MARCH 31, 2012
---------------------------------------------------------------------------
Coal
Share Share royalty Investment Share based
capital premium revaluation revaluation payment
GBP GBP reserve reserve reserve
'000 '000 GBP '000 GBP '000 GBP '000
---------------------------------------------------------------------------
Balance at January 1,
2011 2,175 24,207 88,883 51,780 65
Profit for the period - - - - -
Other comprehensive
income:
Coal royalties:
Royalties valuation
movement taken to
equity - - 23,613 - -
Deferred tax on
valuation - - (7,291) - -
Available-for-sale
investments:
Valuation movement
taken to equity - - - (12,247) -
Deferred tax on
valuation - - - (54) -
Transferred to
income statement on
disposal - - - (3,680) -
Foreign currency
translation - - - - -
-----------------------------------------------------
Total comprehensive
income - - 16,322 (15,981) -
-----------------------------------------------------
Dividends paid - - - - -
Issue of share
capital under share-
based payment 8 1,154 - - -
-----------------------------------------------------
8 1,154 - - -
-----------------------------------------------------
Balance at March 31,
2011 2,183 25,361 105,205 35,799 65
-----------------------------------------------------
----------------------------------------------------------------------------
Foreign
currency Investment Total
translation Special in Retained equity
reserve reserve Own Shares earnings GBP
GBP '000 GBP '000 GBP '000 GBP '000 '000
----------------------------------------------------------------------------
Balance at January 1,
2011 39,686 632 (1,295) 139,755 345,888
Profit for the period - - - 10,573 10,573
Other comprehensive
income:
Coal royalties:
Royalties valuation
movement taken to
equity (3,349) - - - 20,264
Deferred tax on
valuation 987 - - - (6,304)
Available-for-sale
investments:
Valuation movement
taken to equity (408) - - - (12,655)
Deferred tax on
valuation (11) - - - (65)
Transferred to
income statement on
disposal - - - - (3,680)
Foreign currency
translation 155 - - - 155
-------------------------------------------------------
Total comprehensive
income (2,626) - - 10,573 8,288
-------------------------------------------------------
Dividends paid - - (3,457) (3,457)
Issue of share
capital under share-
based payment - - (1,126) - 36
-------------------------------------------------------
- - (1,126) (3,457) (3,421)
-------------------------------------------------------
Balance at March 31,
2011 37,060 632 (2,421) 146,871 350,755
-------------------------------------------------------
Anglo Pacific Group PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED) FOR THE FIFTEEN
MONTHS ENDED MARCH 31, 2012
(CONTINUED)
--------------------------------------------------------------------------
Coal
Share Share royalty Investment Share based
capital premium revaluation revaluation payment
GBP GBP reserve reserve reserve
'000 '000 GBP '000 GBP '000 GBP '000
--------------------------------------------------------------------------
Balance at April 1,
2011 2,183 25,361 105,205 35,799 65
Profit for the
period - - - - -
Other comprehensive
income:
Coal royalties:
Royalties valuation
movement taken to
equity - - (26,457) - -
Deferred tax on
valuation - - 7,921 - -
Available-for-sale
investments:
Valuation movement
taken to equity - - - (39,422) -
Deferred tax on
valuation - - - 5,190 -
Transferred to
income statement
on disposal - - - (6,410) -
Foreign currency
translation - - - - -
-----------------------------------------------------
Total comprehensive
income - - (18,536) (40,642) -
-----------------------------------------------------
Dividends paid - - - - -
Issue of share
capital under
share-based payment 1 178 - - 112
-----------------------------------------------------
1 178 - - 112
-----------------------------------------------------
Balance at December
31, 2011 2,184 25,539 86,669 (4,843) 177
-----------------------------------------------------
---------------------------------------------------------------------------
Foreign
currency Investment
translation Special in Retained Total
reserve reserve Own Shares earnings equity
GBP '000 GBP '000 GBP '000 GBP '000 GBP '000
----------------------------------------------------------------------------
Balance at April 1,
2011 37,060 632 (2,421) 146,871 350,755
Profit for the
period - - - 26,096 26,096
Other comprehensive
income:
Coal royalties:
Royalties valuation
movement taken to
equity 4,187 - - - (22,270)
Deferred tax on
valuation (1,234) - - - 6,687
Available-for-sale
investments:
Valuation movement
taken to equity 173 - - - (39,249)
Deferred tax on
valuation 24 - - - 5,214
Transferred to
income statement
on disposal - - - - (6,410)
Foreign currency
translation 1,430 - - - 1,430
--------------------------------------------------------
Total comprehensive
income 4,580 - - 26,096 (28,502)
--------------------------------------------------------
Dividends paid - - - (5,521) (5,521)
Issue of share
capital under
share-based payment - - (180) 19 130
--------------------------------------------------------
- - (180) (5,502) (5,391)
--------------------------------------------------------
Balance at December
31, 2011 41,640 632 (2,601) 167,465 316,862
--------------------------------------------------------
Anglo Pacific Group PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED) FOR THE FIFTEEN
MONTHS ENDED MARCH 31, 2012
(CONTINUED)
--------------------------------------------------------------------------
Coal
Share Share royalty Investment Share based
capital premium revaluation revaluation payment
GBP GBP reserve reserve reserve
'000 '000 GBP '000 GBP '000 GBP '000
--------------------------------------------------------------------------
Balance at January
1, 2012 2,184 25,539 86,669 (4,843) 177
Profit for the
period - - - - -
Other comprehensive
income:
Coal royalties:
Royalties valuation
movement taken to
equity - - (5,271) - -
Deferred tax on
valuation - - 1,581 - -
Available-for-sale
investments:
Valuation movement
taken to equity - - - 521 -
Deferred tax on
valuation - - - (322) -
Transferred to
income statement
on disposal - - - (290) -
Foreign currency
translation - - - - -
-----------------------------------------------------
Total comprehensive
income - - (3,690) (91) -
-----------------------------------------------------
Dividends paid - - - - -
Value of employee
services - - - - 38
-----------------------------------------------------
- - - - 38
-----------------------------------------------------
Balance at March 31,
2012 2,184 25,539 82,979 (4,934) 215
-----------------------------------------------------
----------------------------------------------------------------------------
Foreign
currency Investment
translation Special in Retained Total
reserve reserve Own Shares earnings equity
GBP '000 GBP '000 GBP '000 GBP '000 GBP '000
----------------------------------------------------------------------------
Balance at January
1, 2012 41,640 632 (2,601) 167,465 316,862
Profit for the
period - - - 203 203
Other comprehensive
income:
Coal royalties:
Royalties valuation
movement taken to
equity (3,248) - - - (8,519)
Deferred tax on
valuation 961 - - - 2,542
Available-for-sale
investments:
Valuation movement
taken to equity (140) - - - 381
Deferred tax on
valuation - - - - (322)
Transferred to
income statement
on disposal - - - - (290)
Foreign currency
translation 294 - - - 294
--------------------------------------------------------
Total comprehensive
income (2,133) - - 203 (5,711)
--------------------------------------------------------
Dividends paid - - - (4,601) (4,601)
Value of employee
services - - - - 38
--------------------------------------------------------
- - - (4,601) (4,563)
--------------------------------------------------------
Balance at March 31,
2012 39,507 632 (2,601) 163,067 306,588
--------------------------------------------------------
Anglo Pacific Group PLC
CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 2012
----------------------------------------------------------------------------
Three months Three months
ended March ended March
31, 2012 31, 2011
GBP '000 GBP '000
Cash flows from operating activities
Profit before taxation 445 13,261
Adjustments for:
Interest received (287) (322)
Unrealised foreign currency loss 895 1,094
Depreciation of property, plant and
equipment 5 5
Amortisation of intangibles - royalties 254 254
Gain on disposal of mining and exploration
interests (647) (4,427)
Loss on write down of assets - 147
Share based payments 39 -
---------------- ----------------
704 10,012
Decrease/(Increase) in trade and other
receivables 10,372 (2,390)
Decrease in trade and other payables (85) (53)
Receipt from royalty instruments 399 143
---------------- ----------------
Cash generated from operations 11,390 7,712
Income taxes paid (1,857) (4,070)
---------------- ----------------
Net cash from operating activities 9,533 3,642
---------------- ----------------
Cash flows from investing activities
Proceeds on disposal of mining and
exploration interests 1,544 8,016
Purchase of mining and exploration
interests (17,996) (14,160)
Purchases of property, plant and equipment - (28)
Interest received 236 220
---------------- ----------------
Net cash used in investing activities (16,216) (5,952)
---------------- ----------------
Cash flows from financing activities
Dividends paid (4,601) (3,457)
---------------- ----------------
Net cash used in financing activities (4,601) (3,457)
---------------- ----------------
Net decrease in cash and cash equivalents (11,284) (5,767)
Cash and cash equivalents at beginning of
period 32,197 28,258
---------------- ----------------
Cash and cash equivalents at end of period 20,913 22,491
---------------- ----------------
---------------- ----------------
The results for the three months ended March 31, 2012 and 2011 have neither been audited nor reviewed by the Group's
auditors.
1 Basis of preparation
The interim condensed consolidated interim financial information of Anglo Pacific Group PLC contained in this release is
for the three months ended March 31, 2012. This information has been prepared in accordance with IAS 34 'Interim
Financial Reporting', as adopted by the European Union, however this release does not include sufficient information to
comply with IFRS, and should be read in conjunction with the consolidated financial statements of the Group for the year
ended December 31, 2011 and the condensed consolidated interim financial statements for the period ended March 31, 2012.
The condensed consolidated interim financial statements have been prepared in accordance with the accounting policies
adopted in the last annual financial statements for the year to December 31, 2011, which were prepared in accordance
with IFRS, as adopted by the European Union.
This condensed consolidated quarterly and year to date financial information does not comprise statutory accounts within
the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended December 31, 2011 were
approved on March 6, 2012. These accounts which contained an unqualified audit report under Section 495 of the Companies
Act 2006 and which did not make any statements under Section 498 of the Companies Act 2006, have been delivered to the
Registrar of Companies in accordance with Section 441 of the Companies Act 2006.
The results for the three months ended March 31, 2012 and 2011 have neither been audited nor reviewed by the Group's
auditors.
2 Non-current assets
(a) Coal royalties
The Group's coal royalties comprise the Kestrel and Crinum coal royalties in Queensland, Australia.
The Group commissioned a valuation of the coal royalties as at March 31, 2012, based on a net present value of the pre-
tax cash flow discounted at a rate of 7%, which produced a valuation of A$257.8 million (GBP 166.6 million). At present
the net royalty income is taxed in Australia at a rate of 30%. Were the coal royalties to be realised at the revalued
amount there are GBP 2.4 million (A$3.7 million) of capital losses potentially available to offset against taxable
gains. These losses have been included in the deferred tax computation.
(b) Royalty instruments
Royalty instruments represent the Group's interests in four mineral properties which, through the issue of convertible
debentures, the Group has acquired GRR or NSR royalties. These are the Engenho property in Brazil, the El Valle-
Boinas/Carles property in Spain, the Jogjakarta Iron Sands Project in Indonesia and the Midway-McKenzie Break properties
in Canada. In the Group's latest annual financial statements for the year ended December 31, 2011, these interests were
described as "Royalty Instruments". No change has been made to the accounting treatment of these interests.
(c) Intangibles
Intangible royalty interests represent the NSR royalties acquired on the Four Mile project in South Australia, the
Salamanca uranium project in Spain, the Black Thor, Black Label and Big Daddy chromite projects in Northern Ontario,
Canada and a number of tenements in the Athabasca Basin region of Canada, together with the gross revenue royalties
covering the Amapa iron ore system in Brazil, the Isua iron ore project in Greenland and three exploration licences,
including the Railway iron ore deposit, in the central Pilbara region of Western Australia.
Acquisition costs of royalty interests on feasibility stage mineral properties are not amortised. At such time as the
associated mineral interests are placed into production, the cost base is amortised over the expected life of mine.
Amortisation rates are adjusted on a prospective basis for all changes to estimates of the life of mine.
Also included within intangibles are the deferred exploration costs of GBP 828,000 (December 31, 2011: GBP 804,000)
associated with the Group's Panorama and Trefi Projects in British Columbia, Canada.
(d) Mining and exploration Interests
The investments in mining and exploration interests represent investments in listed and unlisted equity securities which
are acquired as part of the Group strategy to acquire new royalties. Gains may be realised where it is deemed
appropriate by the Investment Committee. The fair values of these securities are based on quoted market prices for
listed securities and cost for unlisted securities based on the variability of cash flows being so significant that an
alternative valuation technique would not provide a useful value. The fair values are reviewed for impairment
biannually. In the statement of changes in equity these interests are classified as "available- for- sale investments".
For a full explanation of the Group's accounting policies in relation to the mining and exploration interests please see
the 2011 Annual Report.
Cautionary statement on forward-looking statements and related information
Certain information contained in this press release, including any information as to future financial or operating
performance and other statements that express management's expectation or estimates of future performance, constitute
"forward looking statements". The words "expects", "anticipates", "plans", "believes", "estimates", "seeks", "intends",
"targets", "projects", "forecasts", or negative versions thereof and other similar expressions identify forward-looking
statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while
considered reasonable by management, are inherently subject to significant business, economic and competitive
uncertainties and contingencies. Further, forward-looking statements are not guarantees of future performance and
involve risks and uncertainties which could cause actual results to differ materially from those anticipated, estimated
or intended in the forward-looking statements. The material assumptions and risks relevant to the forward-looking
statements in this press release include, but are not limited to: stability of the global economy; stability of local
government and legislative background; continuing of ongoing operations of the properties underlying the Group's
portfolio of royalties in a manner consistent with past practice; accuracy of public statements and disclosures
(including feasibility studies and estimates of reserve, resource, production, grades, mine life, and cash cost) made by
the owners or operators of such underlying properties; no material adverse change in the price of the commodities
underlying the Group's portfolio of royalties and investments; no material adverse change in foreign exchange exposure;
no adverse development in respect of any significant property in which the Group holds a royalty or other interest,
including but not limited to unusual or unexpected geological formations and natural disasters;
successful completion of new development projects; planned expansions or additional projects being within the timelines
anticipated and at anticipated production levels; and maintenance of mining title. If any such risks actually occur,
they could materially adversely affect the Group's business, financial condition or results of operations. For
additional information with respect to such risks and uncertainties, please refer to the "Risk Factors" section of our
most recent Annual Information Form available on www.SEDAR.com and the Group's website www.anglopacificgroup.com.
Readers are cautioned to consider these and other factors, uncertainties and potential events carefully and not to put
undue reliance on forward-looking statements. The forward-looking statements contained in this press release are made as
of the date of this press release only and the Group undertakes no obligation to update or revise publicly any forward-
looking statements, whether as a result of new information, future events or otherwise, after the date on which the
statements are made or to reflect the occurrence of unanticipated events.
FOR FURTHER INFORMATION PLEASE CONTACT:
Anglo Pacific Group PLC
Peter Boycott
Chairman
+44 (0) 20 3435 7400
OR
Anglo Pacific Group PLC
John Theobald
Chief Executive Officer
+44 (0) 20 3435 7400
OR
Anglo Pacific Group PLC
Chris Orchard
Chief Investment Officer
+44 (0) 20 3435 7400
www.anglopacificgroup.com
OR
Liberum Capital
Chris Bowman
+44 (0) 20 3100 2000
OR
Liberum Capital
Christopher Kololian
+44 (0) 20 3100 2000
OR
Pelham Bell Pottinger
Lorna Spears
+44 (0) 20 7861 3232
OR
Pelham Bell Pottinger
James Macfarlane
+44 (0) 20 7861 3232
Anglo Pacific Group Plc
Friday, 17th May 2024
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