9th Jan 2015 08:28
LONDON (Alliance News) - Commodity-focused investment company Anglo Pacific Group PLC said it expects a further ramp up in production levels at Rio Tinto's Kestrel mine, generating higher royalty income for Anglo Pacific.
The company's core asset is its 50% ownership of mining and mineral rights from the Kestrel and Crinum mines, located in Queensland, Australia, which entitle it to coal royalty receipts. These mines are operated by Rio Tinto Coal Australia and BM Alliance Coal Operations Pty Ltd, a 50:50 joint venture between BHP Billiton and Mitsubishi.
Anglo Pacific, a natural resources business said its expects production within its royalty lands from the Rio Tinto Kestrel mine to be in the range of 20% to 25% for the first half of 2015, and 70% to 75% for the second half of the year, based on Rio Tinto's guidance.
It said it expected the trend of increasing production within its royalty lands to continue throughout 2016 and 2017 as well.
"We expect a further ramp up in production levels at Rio Tinto's Kestrel mine during 2015, and expect tonnage mined within our lands to increase substantially in 2015 with these trends continuing into 2016 and 2017," said Chief Executive Officer Julian Treger in a statement.
"The challenges facing natural resource companies are increasing the demands for alternative financing as reflected by the increasing number of prospective royalty acquisition opportunities in the Anglo Pacific pipeline," he added.
The group said it held cash and cash equivalents of around GBP8.8 million at the end of December, with undrawn credit facilities of USD15 million.
The Kestrel mine mined approximately 5% of production within the company's royalty lands during the second half of 2014, according to information provided by Rio Tinto.
"This was impacted by the Kestrel mine experiencing lower than expected production levels in 2014 as a result of a slower than expected production ramp-up and a panel change out during the fourth quarter that was not expected in previous guidance for production from the company's royalty land," it said.
Anglo Pacific shares were down 1.5% Friday morning at 98.50 pence.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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