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Coronavirus boosts Anglo Pacific’s role as financier to miners

  • Thursday, April 9, 2020
  • Source:ferro-alloys.com

  • Keywords:Anglo Pacific
[Fellow]Coronavirus boosts Anglo Pacific’s role as financier to miners

[ferro-alloys.com]Anglo Pacific Group can draw on its $75 million warchest to finance miners struggling to develop copper, lithium or rare earth projects as the coronavirus pandemic has made it even more difficult for junior players to raise cash.

The London-listed company has thrived on other companies’ need for financing, which has been pressing since a deep commodity price crash around 2016.

The sector had barely recovered when the novel coronavirus had a massive impact on demand, driving raw materials prices back down.

Anglo Pacific’s profits derive from its acquisition of royalties that give it the right to a share of revenue, profit or production, something companies tend only to sell when they have few other options as it erodes their future earnings.

“As financer to the mining sector, we will see greater opportunities,” Anglo Pacific CEO Julian Treger told Reuters in an interview.

“As we move forward, we have more negotiating leverage and in the second half of the year, we think this will result in some interesting transactions for us.”

The company, he added, was reaching out to those hit by lower commodity prices or government-mandated shutdowns.

So far, Anglo Pacific has royalties in coking coal, iron ore and uranium. It is seeking to acquire royalties from metals such as copper and lithium and rare earth minerals, which are associated with a shift towards greater electrification.

Geographically, it is looking for projects in South America, Australia and Europe.

Anglo Pacific already has a warchest of $75 million without needing to raise more capital, Treger said.

Mining disruptions across the world, as governments limit economic activity to contain the coronavirus, have affected less than 1% of Anglo Pacific’s annual income so far, the company said.

Its main assets are the Kersel and Narrabi mines in Australia and Maracás Menchen in Chile, where governments have not imposed the kind of total lockdowns seen in countries such as Peru and South Africa.

Anglo Pacific, the only London-listed mining royalty company, also said on Tuesday its 2019 royalty related revenue rose 21% to 55.7 million pounds on a strong performance at Kestrel.

It increased its final dividend 32% to 4.125 pence.

Analysts agree the company is resilient.

“Anglo Pacific remains well-positioned even in a downside scenario thanks to the group’s royalty and streaming business model and high levels of liquidity,” RBC Capital Markets said in a note.

(Mining.com)

  • [Editor:王可]

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