Anglo Pacific Group PLC - INTERIM RESULTS FOR THE SIX MONTHS ENDED 30TH JUNE
2010
LONDON, Aug. 26 /CNW/ - Anglo Pacific Group PLC, the natural resources royalties company, today announces its interim results for the six months ended 30th June 2010 which demonstrate further progress in the development and diversification of its royalties portfolio. The Group has received increased royalty income from its existing assets and announces an increase in the interim dividend.
Financial Highlights
Royalties
- Total value of royalties excluding coal increased to (pnds stlg)46.5
million (31st December 2009: (pnds stlg)27.3 million).
- Royalty income for the period increased to (pnds stlg)15.7 million
(2009: (pnds stlg)11.7 million).
- Australian coal royalties independent valuation of (pnds stlg)158
million (31st December 2009: (pnds stlg)149.9 million).
Assets
- Total assets of (pnds stlg)325 million (31st December 2009:
(pnds stlg)312 million).
- Total quoted and unquoted strategic interests valued at (pnds stlg)
87.8 million (31st December 2009: (pnds stlg)113.5 million).
- Cash and royalty receivables at 30th June 2010 of (pnds stlg)29.5
million (31st December 2009: (pnds stlg)17.9 million).
- The Group remains debt free.
Earnings
- Profit before tax increased to (pnds stlg)31.7 million (2009: (pnds
stlg)12.3 million).
- Earnings per share of 22.91p (2009: 8.24p).
- Realised profits for the period from disposal of mining interests of
(pnds stlg)17.4 million (2009: (pnds stlg)2.1 million).
Dividends
- Interim dividend increased by 6.8% to 3.95p per share (2009: 3.70p)
in line with progressive dividend policy.
Operational Highlights
- Further diversification of the Group's royalties portfolio, by
commodity and geography.
- New royalties agreed in iron ore, gold, chromite and nickel.
- Initial NI 43-101 and JORC compliant resource announced for the
Panorama Coal Project in British Columbia, Canada.
- Group's ordinary shares listed on the Toronto Stock Exchange (TSX)
from 9th July 2010 under symbol APY.
- Market demand for mining finance remains strong.
Commenting on the interim results, Peter Boycott, Chairman of Anglo Pacific, said:
"I am pleased to report that, despite the fluctuations in equity markets and the economic uncertainties, the Group has continued to make good progress with its strategy of developing a leading portfolio of royalty projects. During the period we have developed and diversified our portfolio further by agreeing the acquisition of four new royalties, whilst at the same time seeing a significant increase in the royalties received from our existing assets and developing our various private Canadian coal assets.
Anglo Pacific is now quoted on both the TSX and the LSE and the profile of the Group both in the industry and amongst investors continues to grow. We look forward to expanding our shareholder base in North America in the coming months. The Board remains confident it can continue with its strategy of acquiring new royalties to generate cashflows and is therefore pleased to be able to announce a further 6.8% increase in the dividend for shareholders at the interim stage."
Important notice
----------------
This report contains forward-looking statements based on assumptions and reflects Anglo Pacific's expectations, estimates and projections of future events as of the date of this report. Forward-looking statements include, without limitation, statements regarding the performance, prospects, opportunities, priorities, targets, goals, objectives, strategies, growth and outlook of Anglo Pacific. Often, but not always, forward-looking statements can be identified by the use of words such as "expects", "anticipates", "plans", "believes", "estimates", "seeks", "intends", "targets", "projects", "forecasts", or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved.
Forward-looking statements are based upon certain material factors and assumptions that were applied in drawing a conclusion or making a forecast or projection, including assumptions and analyses made by Anglo Pacific in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors that are believed to be appropriate in the circumstances. Also, forward-looking statements involve known and unknown risks, uncertainties and other factors that are beyond the Company's control and which may cause the actual results, performance or achievement to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such material factors and assumptions and risks and uncertainties include, among others, those described in the Company's annual information form dated as of 29th June 2010 ("AIF", available on Anglo Pacific's website and at www.sedar.com), which are incorporated by reference into this report and qualify any and all forward-looking statements made in this report.
Although Anglo Pacific has attempted to identify factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. There can be no assurance that actual results will be consistent with these forward-looking statements. Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements herein relate only to events or information as of the date on which the statements are made and, except as specifically required by law, Anglo Pacific undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, estimates or opinions, future events or results or otherwise.
The mineral resource estimates related to the Panorama Coal Project included in this report were reviewed and approved by Mr. Robert J. Morris (Principal Geologist) and Mr. Robert F. Engler (Principal) of Moose Mountain Technical Services (each a Qualified Person under NI 43-101 and independent of the Company) and documented in the technical report entitled "Resource Estimate for the Discovery and Panorama Coal Properties" dated 28th March, 2010 as prepared by Mr. Robert J. Morris (Principal Geologist) and Mr. Robert F. Engler (Principal) of MMTS. A copy of this report is available under the Company's profile at www.sedar.com. Each of the Discovery Property and the Panorama Property are early-stage exploration properties and seasonal weather conditions prevented Mr. Morris from completing a personal inspection of the properties. A site visit has recently been completed, and an updated technical report will be filed.
Anglo Pacific Group PLC
CHAIRMAN'S STATEMENT
-------------------------------------------------------------------------
Review and Results for six months ended 30th June 2010
Despite sharp equity market fluctuations and economic uncertainties the Group has made further progress during the first six months of 2010. The Group has agreed to acquire several new royalties and the value of the Group's total assets has increased. Furthermore, the Group obtained a secondary listing for its ordinary shares on the TSX and received record coking coal royalties during the period.
The Group's royalty revenues were (pnds stlg)15.7 million for the first half of 2010 compared to (pnds stlg)11.7 million during the same period last year. Prices of both thermal and metallurgical coal from Australia have continued to benefit from increasing demand from India, China and the Far East with contracted prices in excess of US$100 and US$220 per ton respectively being achieved. The Group's Australian coal royalty interests were independently valued at 30th June 2010 at (pnds stlg)158 million compared to (pnds stlg)149.9 million at 31st December 2009 and (pnds stlg)113 million at 30th June 2009.
The Group realised capital gains of (pnds stlg)17.4 million during the period from the sale of mining interests, compared to (pnds stlg)2.1 million during the corresponding period in 2009. Including royalty revenues, the Group achieved earnings of 22.91p per share for the half year compared to 8.24p for the first six months of 2009.
During the half year the Group agreed the acquisition of four new royalties. At the period end the total of the Group's royalty entitlements shown in the financial statements at valuation, excluding the value of the Group's coal royalty, was (pnds stlg)28.2 million compared to (pnds stlg)22 million at 31st December 2009. In addition the total of the Group's royalty entitlements treated as intangibles and carried in the financial statements at cost was (pnds stlg)18.3 million compared to (pnds stlg)5.3 million at 31st December 2009. These bring the total value of non-coal royalties to (pnds stlg)46.5 million, compared to (pnds stlg)27.3 million at 31st December 2009.
The value of the Group's private mining interests and quoted stakes in mining companies reduced to (pnds stlg)87.8 million at 30th June 2010 compared to (pnds stlg)113.5 million at 31st December 2009. This was mainly as a result of the disposal of a number of mining interests.
At 30th June 2010 the Group had cash and royalty receivables of (pnds stlg)29.5 million with no borrowings.
These earnings and balance sheet valuations show steady progress during a period of continued uncertainty for the world economy. The Group remains committed to a conservative approach to the management of the assets under its control.
The Board is increasing the interim dividend for the year ending 31st December 2010 by 6.8% to 3.95p per share.
Strategy and Progress
The Group's strategy remains focused on securing new royalties by acquisition and through investment in its mining interests in order to generate strong cashflows and continue to pay dividends to its shareholders. The Group remains committed to a progressive dividend policy and to further expanding its other mining interests and royalty flows in pursuit of this objective.
Royalties
The Group has continued to expand its portfolio by agreeing to acquire four new royalties during the half year. These iron ore, gold, chromite and nickel royalties further broaden and diversify the Group's royalty portfolio.
- Iron Ore (Australia): in May 2010 the Group announced that it had
agreed to purchase the DFD Rhodes Group iron ore royalty, covering
three exploration licences in the central Pilbara region of Western
Australia (the "Pilbara Deposits"), for a sum of A$23 million in
cash. The tenements, covering 263 square kilometres, are owned by a
wholly owned subsidiary of BHP Billiton ("BHPB") and are subject to a
1.5% royalty on total gross revenue. The royalty tenements host a
number of known iron occurrences, the most significant being the
Railway deposit. The tenements are supported by extensive rail
infrastructure including the rail lines from Rio Tinto's West Angelas
and Yandicoogina mines and BHPB's rail line serving its current
operations at Mining Area C, which lies immediately to the east of
the Railway deposit. The transaction completed on 30th June 2010. The
Group is pleased to have acquired such a high quality royalty and
anticipates that these iron ore deposits will be mined by BHPB in
years to come as part of its planned expansion of iron ore output in
the Pilbara.
- Gold (Tanzania): in May 2010 the Group announced that it had agreed
with Shanta Gold PLC, subject to contract and due diligence, a
royalty financing of US$5 million. Shanta Gold has agreed to pay the
Group a 3% Net Smelter Royalty ("NSR") on all of the mined product
from its Chunya Gold Project in south west Tanzania as well as a
further 2% NSR on its Singida Gold Project in central northern
Tanzania.
- Chromite (Albania): in May 2010 the Group announced that, subject to
contract and due diligence, it had agreed with Empire Mining
Corporation to acquire for C$3.1 million a 3% gross royalty (GR) on
the Bulquiza-Batra chromite project in Albania. These funds will
enable Empire Mining to advance project exploration and development
with the aim of moving towards production as early as 2011.
- Nickel (Brazil): in May 2010 the Group agreed, subject to contract
and due diligence, to pay to Horizonte Minerals PLC the sum of US
$500,000 in exchange for an option to acquire for US$12.5 million a
1.5% NSR on all revenue from the Araguaia nickel project in Brazil.
This nickel laterite project was acquired from Teck Resources Limited
of Canada in exchange for a 50% equity stake in Horizonte Minerals.
Assets
At 30th June 2010 the Group's cash, receivables and strategic investments were (pnds stlg)118.3 million (31st December 2009: (pnds stlg)132.7 million). Together with the Group's coal and other royalties worth (pnds stlg)204.5 million and fixed assets and capitalised exploration costs of (pnds stlg)2.7 million, the Group's total assets at 30th June 2010 were (pnds stlg)325 million (31st December 2009: (pnds stlg)312 million).
The Group remains debt free and its liquid resources are held in a spread of currencies and banks. The Group's mining interests, royalty revenues and cash holdings are mainly denominated in Australian and Canadian dollars.
Private Coal Projects
On 16th February 2010 the Group released an initial resource statement on the wholly owned Panorama Coal Project in the Groundhog Coalfield in Northwest British Columbia. This showed a NI 43-101 and JORC compliant Indicated Resource of 13.7 million tonnes and an Inferred Resource of 24.1 million tonnes of semi-anthracite to anthracite coal.
Work continues on the scoping study at the Group's Trefi Coal Project in British Columbia.
Quoted Equity Interests
The Group's quoted equity interests disclosed on the LSE, ASX and TSX, where initial equity stake disclosure levels are 3%, 5% and 10% respectively, amounted to (pnds stlg)71 million in eighteen different holdings. The balance of quoted holdings of (pnds stlg)7 million is made up of a further sixteen incubator investments. The split of the Group's strategic interests by commodity can be seen on the Group's website at www.anglopacificgroup.com where links to all the equity disclosures can be accessed.
Dividends
On 7th July 2010 a final dividend of 4.65p per share for the year ended 31st December 2009 was paid. Shareholders representing 24% of the issued share capital elected to take scrip instead of cash. The interim dividend announced today of 3.95p per share for the year ending 31st December 2010 will be paid on 12th January 2011. A scrip dividend alternative will again be available to eligible shareholders subject to market conditions.
Overseas Listings
On 28th May 2010 at Anglo Pacific's request its shares were de-listed from the Australian Stock Exchange due to a lack of liquidity, negligible volumes and less than two percent of the Group's share capital being held on the Australian share register.
Reflecting the continued development of the Group and its royalty asset base, the listing of the Group's ordinary shares on the TSX was completed on 9th July 2010 under the symbol APY. As a substantial number of the Group's private and quoted mining interests are in Canada, it is the Group's medium term strategy to broaden the shareholder base to embrace North American investors. The Canadian listing also increases the profile of the Group more broadly within the industry and in a market where royalty financing is well established and has a higher profile with investors.
Outlook
Conditions in the equity markets for mining development companies improved in the earlier part of the year. More recently, however, with the decline in commodity prices and fears of a double dip recession, the raising of mining finance from conventional lenders or through equity issues has once again become more challenging.
Within this environment Anglo Pacific, with its cash resources and strong royalty revenues, remains well positioned to work with companies to meet their financing requirements and thereby increase its own royalty portfolio. This remains the Group's dominant strategic focus. The Group is continuing to evaluate several new royalty opportunities.
P. M. Boycott
Chairman
26th August 2010
DISCLOSURE UNDER DISCLOSURE AND TRANSPARENCY RULES
In accordance with Disclosure and Transparency Rules (DTRs), Periodic Financial Reporting DTR 4.2.7R, the Group confirms that the principal risks and uncertainties that could affect the Group's performance have not changed. These are: a prolonged, world-wide economic recession; sustained low commodity prices; a fall in precious metal prices; further deterioration in the banking system; and currency volatility. For more information regarding these risks and uncertainties please refer to page 13 of the 2009 Annual Report.
No related party transactions occurred in the first six months of the year that would require disclosure in accordance with DTR 4.2.8R.
We confirm to the best of our knowledge:
i The condensed set of financial statements has been prepared in
accordance with IAS 34 'Interim Financial Reporting' and give a true
and fair view of assets and liabilities, financial position and
profit and loss;
ii the interim management report includes a fair review of the
information required by DTR 4.2.7R (indication of important events
during the first six months and description of principal risks and
uncertainties for the remaining six months of the year); and
iii the interim management report includes a fair review of the
information required by DTR 4.2.8R (disclosure of related parties
transactions and changes therein).
By order of the Board
M. J. Tack
Finance Director
26th August 2010
Anglo Pacific Group PLC
CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHS ENDED 30th JUNE 2010
-------------------------------------------------------------------------
Six months Six months
ended ended Year ended
30th June 30th June 31st December
2010 2009 2009
(pnds stlg) (pnds stlg) (pnds stlg)
'000 '000 '000
Royalty income 15,679 11,713 20,334
Other operating income 18 2 13
Finance income 570 313 796
------------- ------------- -------------
16,267 12,028 21,143
Profit on sale of mining and
exploration interests 17,372 2,113 6,367
------------- ------------- -------------
Total income 33,639 14,141 27,510
Share of profit of associates 262 - 515
Net operating expenses (2,189) (1,883) (2,142)
------------- ------------- -------------
Profit before tax 31,712 12,258 25,883
Tax (6,981) (3,465) (5,252)
------------- ------------- -------------
Profit attributable to
equity holders 24,731 8,793 20,631
------------- ------------- -------------
------------- ------------- -------------
Basic earnings per share 22.91p 8.24p 19.11p
------------- ------------- -------------
Fully diluted earnings
per share 22.91p 8.24p 19.11p
------------- ------------- -------------
Anglo Pacific Group PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30th JUNE 2010
-------------------------------------------------------------------------
Six months Six months
ended ended Year ended
30th June 30th June 31st December
2010 2009 2009
(pnds stlg) (pnds stlg) (pnds stlg)
'000 '000 '000
Profit for the financial period 24,731 8,793 20,631
Other comprehensive income
Net gain/(loss) on revaluation
to coal royalties 6,362 18,567 42,916
Net (loss)/gain on revaluation
of available for sale
investments (2,946) 31,833 63,737
Net exchange gain/(loss) on
translation of foreign
operations 1,651 1,636 15,585
Share of other comprehensive
income of associates 103 - (65)
Deferred tax (1,635) (8,879) (21,770)
------------- ------------- -------------
Net income/(expense) recognised
directly in equity 28,266 51,950 121,034
------------- ------------- -------------
Transferred to income statement
disposal of available for
sale investments (16,238) 1,080 322
------------- ------------- -------------
Total transferred (to)/from
equity (16,238) 1,080 322
------------- ------------- -------------
------------- ------------- -------------
Total comprehensive income
for the financial period 12,028 53,030 121,356
------------- ------------- -------------
------------- ------------- -------------
Anglo Pacific Group PLC
CONSOLIDATED BALANCE SHEET
AS AT 30th JUNE 2010
-------------------------------------------------------------------------
30th June 30th June 31st December
2010 2009 2009
(pnds stlg) (pnds stlg) (pnds stlg)
'000 '000 '000
------------- ------------- -------------
Non-current assets
Property plant and equipment 2,077 827 1,742
Coal royalties 157,977 113,023 149,896
Royalty instruments 28,159 11,319 21,979
Intangibles 18,921 3,030 6,095
Mining and exploration interests 84,494 81,963 109,695
Investments in associates 3,324 - 3,771
------------- ------------- -------------
294,952 210,162 293,178
Current assets
Trade and other receivables 11,679 6,214 5,082
Cash at bank 18,841 14,364 14,195
------------- ------------- -------------
30,520 20,578 19,277
------------- ------------- -------------
Total assets 325,472 230,740 312,455
------------- ------------- -------------
------------- ------------- -------------
Non-current liabilities
Deferred tax 51,594 35,925 47,883
------------- ------------- -------------
51,594 35,925 47,883
Current liabilities
Taxation 4,323 1,970 4,146
Trade and other payables 429 309 390
Dividends payable 3,788 1,947 -
------------- ------------- -------------
8,540 4,226 4,536
------------- ------------- -------------
Total liabilities 60,134 40,151 52,419
------------- ------------- -------------
Capital and reserves
attributable to shareholders
Share capital 2,171 2,123 2,149
Share premium 23,262 18,604 20,718
Coal royalty revaluation reserve 92,929 71,549 88,582
Investment revaluation reserve 18,566 7,642 36,850
Share based payment reserve 2 78 78
Foreign currency translation
reserve 20,038 8,557 18,804
Special reserve 632 632 632
Investment in own shares (1,295) - -
Retained earnings 109,033 81,404 92,223
------------- ------------- -------------
Total equity 265,338 190,589 260,036
------------- ------------- -------------
------------- ------------- -------------
Total equity and liabilities 325,472 230,740 312,455
------------- ------------- -------------
------------- ------------- -------------
Anglo Pacific Group PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30th JUNE 2009
-------------------------------------------------------------------------
Coal Share
royalty Investment based
Share Share revaluation revaluation payment
capital premium reserve reserve reserve
(pnds (pnds (pnds (pnds (pnds
stlg) stlg) stlg) stlg) stlg)
'000 '000 '000 '000 '000
-------------------------------------------------------------------------
Balance at
1st January 2009 2,123 18,604 58,430 (22,149) 78
Profit for the
period - - - - -
Other comprehensive
income:
Coal royalties:
Royalties valuation
movement taken
to equity - - 18,567 - -
Deferred tax on
valuation - - (5,448) - -
Available-for-sale
investments:
Valuation movement
taken to equity - - - 31,833 -
Deferred tax on
valuation - - - (3,122) -
Transferred to
income statement
on disposal - - - 1,080 -
Reclassification
as investment in
associate - - - - -
Share of comprehensive
income of associates - - - - -
Foreign currency
translation - - - - -
-----------------------------------------------------
Total comprehensive
income - - 13,119 29,791 -
-----------------------------------------------------
Dividends paid - - - - -
Scrip dividend - - - - -
Issue of share
capital - - - - -
Issue of share
capital under
share-based payment - - - - -
-----------------------------------------------------
Transactions with
owners - - - - -
-----------------------------------------------------
Balance at
30th June 2009 2,123 18,604 71,549 7,642 78
-----------------------------------------------------
Foreign
currency Investment
translation Special In Own Retained Total
reserve reserve Shares earnings equity
(pnds (pnds (pnds (pnds (pnds
stlg) stlg) stlg) stlg) stlg)
'000 '000 '000 '000 '000
-------------------------------------------------------------------------
Balance at
1st January 2009 7,230 632 - 80,894 145,842
Profit for the
period - - - 8,793 8,793
Other comprehensive
income:
Coal royalties:
Royalties valuation
movement taken
to equity 1,108 - - - 19,675
Deferred tax on
valuation (326) - - - (5,774)
Available-for-sale
investments:
Valuation movement
taken to equity 22 - - - 31,855
Deferred tax on
valuation 17 - - - (3,105)
Transferred to
income statement
on disposal - - - - 1,080
Reclassification
as investment in
associate - - - - -
Share of comprehensive
income of associates - - - - -
Foreign currency
translation 506 - - - 506
-----------------------------------------------------
Total comprehensive
income 1,327 - - 8,793 53,030
-----------------------------------------------------
Dividends paid - - - (8,283) (8,283)
Scrip dividend - - - - -
Issue of share
capital - - - - -
Issue of share
capital under
share-based payment - - - - -
-----------------------------------------------------
Transactions with
owners - - - (8,283) (8,283)
-----------------------------------------------------
Balance at
30th June 2009 8,557 632 - 81,404 190,589
-----------------------------------------------------
Anglo Pacific Group PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 31st DECEMBER 2009
-------------------------------------------------------------------------
Coal Share
royalty Investment based
Share Share revaluation revaluation payment
capital premium reserve reserve reserve
(pnds (pnds (pnds (pnds (pnds
stlg) stlg) stlg) stlg) stlg)
'000 '000 '000 '000 '000
-------------------------------------------------------------------------
Balance at
30th June 2009 2,123 18,604 71,549 7,642 78
Profit for the
period - - - - -
Other comprehensive
income:
Coal royalties:
Royalties valuation
movement taken
to equity - - 24,349 - -
Deferred tax on
valuation - - (7,316) - -
Available-for-sale
investments:
Valuation movement
taken to equity - - - 31,958 -
Deferred tax on
valuation - - - (1,938) -
Transferred to
income statement
on disposal - - - (758) -
Reclassification
as investment
in associate - - - (54) -
Share of comprehensive
income of associates - - - - -
Foreign currency
translation - - - - -
-----------------------------------------------------
Total comprehensive
income - - 17,033 29,208 -
-----------------------------------------------------
Dividends paid - - - - -
Scrip dividend 24 1,966 - - -
Issue of share
capital - - - - -
Issue of share
capital under
share-based payment 2 148 - - -
-----------------------------------------------------
Transactions with
owners 26 2,114 - - -
-----------------------------------------------------
Balance at
31st December 2009 2,149 20,718 88,582 36,850 78
-----------------------------------------------------
Foreign
currency Investment
translation Special in Own Retained Total
reserve reserve Shares earnings equity
(pnds (pnds (pnds (pnds (pnds
stlg) stlg) stlg) stlg) stlg)
'000 '000 '000 '000 '000
-------------------------------------------------------------------------
Balance at
30th June 2009 8,557 632 - 81,404 190,589
Profit for the
period - - - 11,838 11,838
Other comprehensive
income:
Coal royalties:
Royalties valuation
movement taken
to equity 12,525 - - - 36,874
Deferred tax on
valuation (3,681) - - - (10,997)
Available-for-sale
investments:
Valuation movement
taken to equity (14) - - - 31,944
Deferred tax on
valuation 44 - - - (1,894)
Transferred to
income statement
on disposal - - - - (758)
Reclassification
as investment
in associate - - - - (54)
Share of comprehensive
income of associates (65) - - - (65)
Foreign currency
translation 1,438 - - - 1,438
-----------------------------------------------------
Total comprehensive
income 10,247 - - 11,838 68,326
-----------------------------------------------------
Dividends paid - - - (1,019) (1,019)
Scrip dividend - - - - 1,990
Issue of share
capital - - - - -
Issue of share
capital under
share-based payment - - - - 150
-----------------------------------------------------
Transactions with
owners - - - (1,019) 1,121
-----------------------------------------------------
Balance at
31st December 2009 18,804 632 - 92,223 260,036
-----------------------------------------------------
Anglo Pacific Group PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30th JUNE 2010
-------------------------------------------------------------------------
Coal Share
royalty Investment based
Share Share revaluation revaluation payment
capital premium reserve reserve reserve
(pnds (pnds (pnds (pnds (pnds
stlg) stlg) stlg) stlg) stlg)
'000 '000 '000 '000 '000
-------------------------------------------------------------------------
Balance at
1st January 2010 2,149 20,718 88,582 36,850 78
Profit for the
period - - - - -
Other comprehensive
income:
Coal royalties:
Royalties valuation
movement taken
to equity - - 6,362 - -
Deferred tax on
valuation - - (2,015) - -
Available-for-sale
investments:
Valuation movement
taken to equity - - - (2,946) -
Deferred tax on
valuation - - - 900 -
Transferred to
income statement
on disposal - - - (16,238) -
Reclassification
as investment
in associate - - - - -
Share of comprehensive
income of associates - - - - -
Foreign currency
translation - - - - -
-----------------------------------------------------
Total comprehensive
income - - 4,347 (18,284) -
-----------------------------------------------------
Dividends paid - - - - -
Scrip dividend 11 1,199 - - -
Issue of share
capital - - - - -
Issue of share
capital under
share-based payment 11 1,345 - - (76)
-----------------------------------------------------
Transactions with
owners 22 2,544 - - (76)
-----------------------------------------------------
Balance at
30th June 2010 2,171 23,262 92,929 18,566 2
-----------------------------------------------------
Foreign
currency Investment
translation Special in Own Retained Total
reserve reserve Shares earnings equity
(pnds (pnds (pnds (pnds (pnds
stlg) stlg) stlg) stlg) stlg)
'000 '000 '000 '000 '000
-------------------------------------------------------------------------
Balance at
1st January 2010 18,804 632 - 92,223 260,036
Profit for the
period - - - 24,731 24,731
Other comprehensive
income:
Coal royalties:
Royalties valuation
movement taken
to equity 1,719 - - - 8,081
Deferred tax on
valuation (507) - - - (2,522)
Available-for-sale
investments:
Valuation movement
taken to equity (53) - - - (2,999)
Deferred tax on
valuation (13) - - - 887
Transferred to
income statement
on disposal - - - - (16,238)
Reclassification
as investment
in associate - - - - -
Share of comprehensive
income of associates 103 - - - 103
Foreign currency
translation (15) - - - (15)
-----------------------------------------------------
Total comprehensive
income 1,234 - - 24,731 12,028
-----------------------------------------------------
Dividends paid - - - (7,934) (7,934)
Scrip dividend - - - - 1,210
Issue of share
capital - - - - -
Issue of share
capital under
share-based payment - - (1,295) 13 (2)
-----------------------------------------------------
Transactions with
owners - - (1,295) (7,921) (6,726)
-----------------------------------------------------
Balance at
30th June 2010 20,038 632 (1,295) 109,033 265,338
-----------------------------------------------------
Anglo Pacific Group PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30th JUNE 2010
-------------------------------------------------------------------------
Six months Six months
ended ended Year ended
30th June 30th June 31st December
2010 2009 2009
(pnds stlg) (pnds stlg) (pnds stlg)
'000 '000 '000
Cashflows from operating
activities
Profit before taxation 31,712 12,258 25,883
Adjustments for:
Interest received (570) (313) (796)
Unrealised foreign
currency loss (4) 509 1,562
Depreciation of property,
plant and equipment 9 2 12
(Gain) on disposal of mining
and exploration interests (17,372) (2,113) (6,367)
Loss/(gain) on revaluation of
assets held as fair value
through profit or loss 811 (221) (130)
Loss on write down of assets - - 410
Share of associates (profit) (262) - (515)
Share based payments 12 - 150
------------- ------------- -------------
14,336 10,122 20,209
(Increase)/Decrease in trade
and other receivables (6,597) 5,361 6,493
Increase/(Decrease) in trade
and other payables 29 (540) (459)
------------- ------------- -------------
Cash generated from operations 7,768 14,943 26,243
Income taxes paid (4,729) (4,182) (4,727)
------------- ------------- -------------
Net cash from operating
activities 3,039 10,761 21,516
------------- ------------- -------------
Cash flows from investing
activities
Proceeds on disposal of mining
and exploration interests 29,292 7,856 25,391
Purchase of mining and
exploration interests (13,028) (12,337) (29,195)
Purchases of royalty interests (13,001) (3,030) (12,245)
Acquisition of associates (109) - (1,331)
Return of capital from
associates 949 - -
Purchases of property, plant
and equipment (335) - (80)
Exploration and evaluation
expenditure 176 - (513)
Interest received 570 313 796
------------- ------------- -------------
Net cash generated/(used)
in investing activities 4,514 (7,198) (17,177)
------------- ------------- -------------
Cash flows from financing
activities
Proceeds from issue of
share capital 30 - -
Dividends paid (2,937) (6,335) (7,280)
------------- ------------- -------------
Net cash used in financing
activities (2,907) (6,335) (7,280)
------------- ------------- -------------
Net increase/(decrease) in
cash and cash equivalents 4,646 (2,772) (2,941)
Cash and cash equivalents
at beginning of period 14,195 17,136 17,136
------------- ------------- -------------
Cash and cash equivalents
at end of period 18,841 14,364 14,195
------------- ------------- -------------
------------- ------------- -------------
Anglo Pacific Group PLC
NOTES TO THE ACCOUNTS
-------------------------------------------------------------------------
1. Summary of significant accounting policies
1.1 Basis of preparation
These interim, condensed consolidated financial statements of Anglo
Pacific Group PLC are for the six months ended 30th June 2010. They have
been prepared in accordance with IAS 34 'Interim Financial Reporting'.
They do not include all of the information required for full annual
financial statements, and should be read in conjunction with the
consolidated financial statements of the Group for the year ended
31st December 2009.
These 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 31st December 2009.
1.1.1 Changes in accounting policies and disclosures
(a) New and amended standards adopted by the Group
The Group has adopted the following new and amended IFRSs as of
1st January 2010:
- IFRS 2 (amendments) 'Group Cash-settled Share-based Payment
Transactions' - effective 1st January 2010. As the parent entity
is the only entity within the Group making share-based payments,
the adoption of this amendment has no material effect on the
Group's financial performance or position for the period ended
30 June 2010.
(b) Changes in the Group's accounting policies
The Group has adopted the following changes to its accounting policies as
of 1st January 2010:
- Share-based payments: Following the approval at the 2010 Annual
General Meeting, the Company established the Anglo Pacific Group
plc Employee Benefit Trust through which the Company's Joint
Share Ownership Plan (JSOP) is operated. The full terms of the
JSOP are consistent with those outlined in the Notice of Meeting.
Awards under the JSOP meet the definition of cash-settled
share-based payments under IFRS 2 'Share-based Payments'. The
Group measures the awards under the JSOP and the corresponding
liability incurred at the fair value of the liability. Until the
liability is settled, the Group is required to remeasure the fair
value of the liability at the end of each reporting period and at
the date of settlement, with any changes in value recognised in
the income statement for the period.
Fair value is measured by use of the Monte Carlo model. The
expected life used in the model has been set at four years to
reflect the three year vesting period and the one year exercise
period in accordance with the JSOP agreements.
This condensed consolidated half-year financial information does not
comprise statutory accounts within the meaning of Section 434 of the
Companies Act 2006. Statutory accounts for the year ended 31st December
2009 were approved on 10th March 2010. 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 interim review report is
set out on page 20.
2. Non-current assets
(a) Coal Royalty Investments
The Group's coal royalty investments comprise the Kestrel and Crinum coal
royalties in Queensland, Australia. The Group commissioned a valuation of
the coal royalties as at 30th June 2010, based on a net present value of
the pre-tax cashflow discounted at a rate of 7%, which produced a
valuation of A$281.0 million ((pnds stlg)158 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 (pnds stlg)2.2
million (A$3.9 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 net smelter royalties. These are the Engenho property in
Brazil, the El Valle property in Spain, the Indo Mines property in
Indonesia and the Midway-Malartic and McKenzie Break properties in
Canada. In the Group's latest annual financial statements for the year
ended 31st December 2009, 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 net smelter royalties acquired
on the Four Mile Project in South Australia, the Salamanca Uranium
Project in Spain and the Pilbara Deposit in Western Australia. These
total (pnds stlg)18.3 million (30th June 2009: (pnds stlg)3.0 million).
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 basis 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
(pnds stlg)594,000 (30th June 2009: (pnds stlg)nil) associated with the
Group's Panorama and Trefi Projects in British Columbia, Canada.
(d) Mining and Exploration Interests
The investments in securities included above 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 cashflows
being so significant that an alternative valuation technique would not
provide a useful value. The fair values are reviewed for impairment at
least annually. In the statement of changes in equity these interests are
classified as "available-for-sale investments". During the period to 30th
June 2010 a number of opportunities arose which allowed the Group to
expand its mining interests, particularly in listed securities. For a
full explanation of the Group's accounting policies in relation to the
Mining and Exploration interests please see the 2009 Annual Report.
The market value of the quoted Mining and Exploration Interests at 30th
June 2010 was (pnds stlg)74,414,000 (30th June 2009: (pnds stlg)
69,636,000). The directors' valuation of the unquoted Mining and
Exploration Interests was (pnds stlg)10,080,000 (30th June 2009:
(pnds stlg)12,327,000).
3. Earnings per ordinary share
The earnings per ordinary share is calculated on the Company's profit
after tax of (pnds stlg)24,731,000 and 107,969,443 shares. Fully diluted
earnings per shares is calculated on a profit after tax of (pnds stlg)
24,731,000 and 107,969,443 shares.
Earnings per ordinary share excludes the issue of shares under the
Company's Joint Share Ownership Plan, as the Employee Benefit Trust has
waived its right to receive dividends on the 508,050 ordinary 2p shares
it holds as at 30th June 2010.
4. Segment information
Six months ended 30th June 2010
Mining
Royalty Interests Unallocated Total
(pnds stlg) (pnds stlg) (pnds stlg) (pnds stlg)
'000 '000 '000 '000
Income 15,679 - 18 15,697
------------ ------------ ------------ ------------
Profit on sale of
mining and
exploration interests - 17,372 - 17,372
Interest received - - 570 570
Depreciation - - (9) (9)
Tax - - (6,981) (6,981)
Share of profits of
associates - 262 - 262
------------ ------------ ------------ ------------
Segment Result 15,679 17,634 (8,582) 24,731
------------ ------------ ------------ ------------
Segment Assets 216,631 87,818 21,023 325,472
Segment Liabilities (51,581) (13) (8,540) (60,134)
------------ ------------ ------------ ------------
Net Segment Assets 165,050 87,805 12,483 265,338
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Capital Expenditure - - 335 -
Exploration and
evaluation expenditure - - - -
Six months ended 30th June 2009
Mining
Royalty Interests Unallocated Total
(pnds stlg) (pnds stlg) (pnds stlg) (pnds stlg)
'000 '000 '000 '000
Income 11,713 - 2 11,715
------------ ------------ ------------ ------------
Profit on sale of
mining and
exploration interests - 2,113 - 2,113
Interest received - - 313 313
Depreciation - - (2) (2)
Tax - - (3,465) (3,465)
Share of profits of
associates - - - -
------------ ------------ ------------ ------------
Segment Result 11,713 2,113 (5,033) 8,793
------------ ------------ ------------ ------------
Segment Assets 127,372 81,963 21,405 230,740
Segment Liabilities (34,745) (1,180) (4,226) (40,151)
------------ ------------ ------------ ------------
Net Segment Assets 92,627 80,783 17,179 190,589
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Capital Expenditure - - - -
Exploration and
evaluation expenditure - - - -
Year ended 31st December 2009
Mining
Royalty Interests Unallocated Total
(pnds stlg) (pnds stlg) (pnds stlg) (pnds stlg)
'000 '000 '000 '000
Income 20,334 - 13 20,347
------------ ------------ ------------ ------------
Profit on sale of
mining and exploration
interests - 6,367 - 6,367
Interest received - - 796 796
Depreciation - - (12) (12)
Tax - - (5,252) (5,252)
Share of profits of
associates - 515 - 515
------------ ------------ ------------ ------------
Segment Result 20,334 6,882 (6,585) 20,631
------------ ------------ ------------ ------------
Segment Assets 177,201 115,082 20,172 312,455
Segment Liabilities (47,475) (408) (4,536) (52,419)
------------ ------------ ------------ ------------
Net Segment Assets 129,726 114,674 15,636 260,036
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Capital Expenditure - 88 80 168
Exploration and
evaluation expenditure - 367 - 367
Revenue consists of Royalty income and other operating income. Royalty
income is currently generated in Australia.
5. Own shares held
Following approval at the 2009 Annual General Meeting the Company
established the Anglo Pacific Group plc Employee Benefit Trust (the
"Trust") to be used as part of the remuneration arrangement for
employees. The purpose of the Trust is to facilitate and encourage the
ownership of shares by or for the benefit of employees by the acquisition
and distribution of shares in the Company.
The Company issued 508,050 ordinary 2p shares during the period, to
satisfy its obligations under its Joint Share Ownership Plan.
At 30th June 2010 the Trust held 508,050 (2009 nil) ordinary 2p shares in
Anglo Pacific Group plc.
6. Events occurring after the period end
On 9th July 2010 the Group's ordinary shares were admitted to trading on
the Toronto Stock Exchange under the symbol APY.
7. Availability of financial statements
This statement will be sent to shareholders and will be available at the
Company's registered office at 17 Hill Street, London, W1J 5NZ.
Anglo Pacific Group PLC
INDEPENDENT REVIEW REPORT TO ANGLO PACIFIC GROUP PLC
-------------------------------------------------------------------------
Introduction
We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2010 which comprises the consolidated income statement, consolidated statement of comprehensive income, consolidated balance sheet, consolidated statement of changes in equity, consolidated statement of cash flow and notes 1 to 7. We have read the other information contained in the half yearly financial report which comprises only the Chairman's statement and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the company in accordance with guidance contained in ISRE (UK and Ireland) 2410, 'Review of Interim Financial Information performed by the Independent Auditor of the Entity'. Our review work has been undertaken so that we might state to the company those matters we are required to state to them in a review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusion we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.
As disclosed in Note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting,' as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2010 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.
GRANT THORNTON UK LLP
CHARTERED ACCOUNTANTS
London
26th August 2010
%SEDAR: 00030202E
For further information: Anglo Pacific Group plc, +44 (0) 20 7318 6360, Peter Boycott, Chairman, Matthew Tack, Finance Director; Liberum Capital, +44 (0) 20 3100 2000, Chris Bowman, Ellen Francis; Scott Harris, +44 (0) 20 7653 0030, Stephen Scott, James O'Shaughnessy; Website: www.anglopacificgroup.com
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