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Anglo Pacific's revenues charged by vanadium price surge

Royalty income will be in a range of £17.5mln to £18mln in the half year to June, a 10% increase year-on-year

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Higher coal and vanadium prices have lifted interim revenues at mining royalty specialist Anglo-Pacific PLC (LON:APF).

Royalty income will be in a range of £17.5mln to £18mln in the half year to June, a 10% increase year-on-year after a very strong second quarter.

WATCH: ANGLO PACIFIC ENCOURAGED AS NEW KESTREL OWNER REPORTEDLY SET TO EXPAND PRODUCTION

Kestrel, a coal mine in Australia, will again produce the bulk of this revenue.

Royalty income from the mine is 15% higher than a year ago in a range of £14mln - £14.5mln driven by higher coal prices and production.

Volumes at Kestrel more than doubled in the second quarter compared to the first and will continue at this level for the remainder of the year.

Anglo has also seen a sharp increase in the royalty from the Maracás Menchen vanadium mine in Brazil, which will contribute a record £2.0mln - £2.5mln or already more than the whole of 2017.

Julian Treger, Anglo Pacific’s chief executive, said he is now confident the full year will see ‘further organic growth in our income and cash generation’. 

Kestrel is set to change hands soon but Treger sees this as a bonus for Anglo.

The buyers, Adaro and EMR, recently announced that they intend to double output over the coming years.

“Given that virtually all mining is expected to be within our private royalty area over this period, there is the potential to see a corresponding doubling of our royalty income (depending on commodity prices), which would be a significant and material windfall for the company and its stakeholders.”

Anglo also has exposure to uranium through Berkeley Energia, where production is expected to start shortly, and recently acquired an interest in the Cañariaco copper project in Peru.

Quick facts: Anglo Pacific Group PLC

Price: 213 GBX

LSE:APF
Market: LSE
Market Cap: £386.53 m
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Anglo Pacific to make three more acquisitions before year-end as revenues surge

Julian Treger, chief executive of Anglo-Pacific PLC (LON:APF), tells Proactive's Andrew Scott higher coal and vanadium prices have lifted interim revenues at the mining royalty specialist. Treger says royalty income will be in a range of £17.5mln to £18mln in the half year to June, a 10%...

on 26/7/18

2 min read