10th Nov 2014 14:49
LONDON (Alliance News) - Anglo Pacific Group PLC Monday said production began at its Maracas and Four Mile mines during the third quarter, taking its royalties over mines to five from three, and it said it is continuing to look for further opportunities.
During the third quarter ended November 9, royalty-related income decreased to GBP500,000 from GBP3.2 million in the third quarter of 2013. Non-core mining and exploration realisations totalled GBP1.8 million, with a remaining GBP14.3 million of value left in non-core mining and exploration interests and receivables.
The group's cash balance at the end of the third quarter stood at USD9.2 million and the company has declared an interim dividend for 2014 of 4.45 pence per share, the same as 2013.
During the third quarter, Anglo Pacific received minimal royalty income from Rio Tinto and the Kestrel project in the US. Anglo Pacific is expecting to receive a royalty representing 50% of production in the fourth quarter, and 25% of production for the first nine months of 2015, it said in a statement.
Largo Resources Ltd made its first sale from the Maracas mine in Brazil. Production began at the mine in August and production is increasing and is running at around 70% capacity. Anglo Pacific owns a 2% royalty and is expecting to receive its first royalty payment during the first quarter of 2015.
At the Four Mile uranium mine in Australia, where Anglo Pacific own a 1% royalty, first shipment of 300,000 pounds of Uranium ore concentrate was sent out in September. Its joint venture partner, Alliance Resources Ltd has forecast production of 2.6 million barrels of uranium ore concentrate during 2015. However, this production is to be stockpiled, meaning Anglo Pacific is not expecting any royalty payments from the project until 2016.
Its partner at the El Valle-Boinas Carles mine in Spain, Orvana Minerals Corp, produced 62,957 ounces of gold in the year ended September 30, alongside 156,977 ounces of silver and 5.6 million pounds of copper. Orvana has set guidance of 63,000 to 72,000 ounces of gold, 150,000 to 180,000 ounces of silver and 6 million pounds of copper for the 2015 financial year. Anglo Pacific owns a 2.5% royalty, escalating to 3% for any gold prices in excess of USD1,100 per ounce.
The company also expects to receive minimal royalty payments from the Amapa mine in Brazil as it has started sending its first small shipments since it was suspended in March 2013 following a serious incident.
Anglo Pacific has also booked an impairment charge of USD15 million during the quarter for its Isua mine in Greenland, which is in partnership with London Mining PLC. Administrators for London Mining have been put in place and Anglo Pacific await for further updates.
"The board is encouraged by the commencement of commercial production at Maracás and Four Mile increasing the group's royalties over mines in production from three to five. Anglo Pacific sees the currently challenging commodity market environment as an opportunity for the group to acquire royalties on high quality assets with attractive returns," it said in a statement.
"We are pursuing a number of royalty transactions over producing bulk material and base metals mines and will update the market on these as and when appropriate," it added.
Anglo Pacific shares were down 0.6% to 135.25 pence per share Monday afternoon.
By Joshua Warner; [email protected]; @JoshAlliance
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