Anglo Pacific Group PLC

Anglo Pacific Group PLC generates returns for shareholders by receiving royalties from coal and other mines, primarily in Australia, Canada and Europe - a substantial part of which it pays as shareholder dividends. The income is usually received by way of a "net smelter royalty" (NER) which varies between 1% and 2.5% on the delivered production.

However, in the past few years, it has branched out into gold and nickel, as well as adding uranium interests to its portfolio.

As of 2008, it had 100% control of the Groundhog and Trefi coal interests in British Columbia, Canada and, inter alia:

• 20% direct interest in Core Resources Pty Ltd

• 3.77% of Cambrian Mining PLC (see Audley European Opportunities Master Fund) [Hemscott 14 February 2008]

• 5.3% of Horizonte Minerals PLC [Horizonte Minerals plc Annual report, 31 March 2008]

In early 2009, IMX Resources sold its royalty in four Australian uranium tenements to Anglo Pacific for US$ 6 billion, in order to finance its exploration programme and which, says IMX, would keep the company “fully funded” until June 2010 [MJ 27 March 2009].

In July 2009, Anglo Pacific increased its shareholding of Royalco Resources Ltd to just over 31%; and in September it purchased a 2.5% royalty on Northern Star Mining Corporation’s Midway and McKenzie Break gold projects in Quebec, for C$8 million.

In 2009, the Group added four new "acquisitions" to its royalties' list: for uranium mined in South Australia (the Beverley project); for platinum from Northern Shield's properties in Ontario; in Northern Star's gold projects in Quebec; and in Berkeley Resources' uranium properites in Spain [Anglo Pacific Group, 2009 Annual Report, 24 February 2010].

In late 2010, Anglo Pacific also disclosed a 3.74% stake, held in African Eagle Resources plc, which is exploring the Dutwa nickel deposits in Tanzania [MJ 3 December 2010].

In early 2012, Anglo Pacific accepted a takeover bid for Canadian precious and base metals developer, Magma Metals Ltd. Anglo Pacific had been the largest shareholder(at 17%) until Australia's Panoramic Resources acquired 34% of Magma's shares by May 2 2012 and launched the bid [MJ 4 May 2012].

As of mid-May 2012, the company announced that its royalty income for the first quarter of the year was only £1.5 million (around a sixth of what it had been during the same period the previous year). It had also completed the Mount Ida iron ore royalty acquisition from operator of the project, Australia's Jupiter Mines Ltd [Marketwire 15 May 2012].

Peter Boycott, Chairman of Anglo Pacific, optimistically commented at the time:

"The company continues to receive an increasing number of new enquiries for mining finance, which are being assessed as potential royalty opportunities".

However, he conceded that: "During the [first quarter] period, royalty flows from Kestrel [coal] in Australia were lower compared to the same period last year...Anglo Pacific's strategy remains focused on paying a progressive dividend and acquiring new royalty cash flows from commodities linked to Asian growth."

In early 2012, Anglo Pacific agreed a data-sharing arrangement with Atrum Coal NL, under which the UK company would supply a deposit-sharing model to the metallurgical coal explorer for its Groundhog property which lies adjacent to ANglo Pacific's Discovery property in British Colombia (see above) [MJ 28 September 2012].

In December the same year, the Group agreed a financing deal with London-listed Hummingbird Resources plc, under which Anglo Pacific would provide US$15 million in exchange for a 2% net royalty return on ore produced from Hummingbird's Dugube 1 gold project in Liberia [MJ 21-28 December 2012].