Ecora Royalties Plc · LSE:ECOR
Ecora Royalties — Anglo Pacific Group — Investor Presentation (June 2014)
27 slides from Ecora Royalties's investor presentation, June 2014
Slide 1: Anglo Pacific Group PLC
Anglo Pacific Group PLC June 2014
Slide 2: Important Disclaimer
Important Disclaimer Certain statements in this presentation, other than statements of historical fact, are forward-looking statements By its nature, this information is subject to inherent risks and uncertainties that may be general or specific and based on certain assumptions and reflect the expec
Slide 3: Anglo Pacific Corporate Overview
Anglo Pacific Corporate Overview » The only mining royalty company listed in London » Dual listing: LSE (Premium Listing) and TSX » Diversified commodity exposure across coking coal, iron ore, gold, uranium and chromite » Key royalty asset in Kestrel, a Tier 1 coking and thermal coal mine in Austral
Slide 4: Anglo Pacific Corporate Overview
Anglo Pacific Corporate Overview Key Information Top Shareholders(1) Company Name Anglo Pacific Group PLC Directors 12.1% Ticker APF (LSE), APY (TSX) AXA Investment Management 8.3% Share price(1) 183.5p Schroder Investment Management 7.5% Market capitalisation(1) £203m Liontrust Investment Net cash(
Slide 5: Royalty Financing as an Asset Class
Royalty Financing as an Asset Class Key Themes Description Lower risk » Royalty investments minimise or eliminate direct exposure to: » operating costs of underlying mining operations » cost inflation » capex escalation Cash returns » Royalty companies can generate cash yields for shareholders - unl
Slide 6: New Management – New Vision
New Management – New Vision Anglo Pacific Group PLC BMO Annual rd Global 23Results 2013 Metals & Mining Conference 5
Slide 7: New Management
New Management Julian Treger Mark Potter Director and Chief Executive Officer Director and Chief Investment Officer Julian Treger has over 23 years of investment experience including special Mark Potter has more than 12 years of experience in special situations situations and distressed investing. H
Slide 8: Mission Statement
” To create a leading international diversified royalty company with a focus on base metals and ” bulk materials M I S S I O N S TAT E M E N T Anglo Pacific Group PLC 7
Slide 9: New Strategy
New Strategy Anglo Pacific Group PLC Annual Results 2013 8
Slide 10: New Strategy
New Strategy Anglo Pacific Group PLC 9
Slide 11: New Strategy: Specialise
New Strategy: Specialise Bring Royalty Financing of Base Metals and Bulk Materials into the Mainstream » Coal, iron ore and copper accounted for 50%, 19% and 9% of 2013 global production (by value) respectively vs 9% for gold(1) 13% » A capital intensive sector under significant cash constraint as a
Slide 12: New Strategy: Accelerate
New Strategy: Accelerate Accelerate Growth in Royalty Income and Cash Return » Management objective is to grow net income and dividend » Move focus to royalties on projects that are (1) currently cash flow generating or (2) will be cash flow generating within the next 24 months » Grow margin through
Slide 13: Key Investment Characteristics for Royalty Investments
New Strategy: Accelerate Key Investment Characteristics for Royalty Investments Established mining jurisdictions (North Deal size US$20m America, to US$100m Australia, Western Europe, South America) Focus on near-term cash producing assets with strong economics and where risk can be priced according
Slide 14: Sourcing Deals
New Strategy: Accelerate Sourcing Deals Alternative forms of financing are increasingly popular vs equity fundraisings in the current cash Financing constrained commodity sector for growth Anglo Pacific aims to provide the “last dollar” required for companies to achieve economic production Ang
Slide 15: New Strategy: Diversify
New Strategy: Diversify Re-Balance Commodity Spread to Reduce Risk » Target portfolio would see increased exposure to iron ore, copper and zinc » Opportunistic investment in royalties and streaming transactions in non-core commodities such as oil & gas, uranium, diamonds and precious metals » Review
Slide 16: A Foundation for Growth
A Foundation for Growth Anglo Pacific Group PLC Annual Results 2013 15
Slide 17: Geographic and Commodity Exposure across Principal Royalty Assets
Geographic and Commodity Exposure across Principal Royalty Assets PRODUCTION ASSETS 1 Kestrel (Coking coal) 2 Amapá (Iron ore) 6 3 Tucano (Iron ore) 10 4 El Valle-Boinás/Carlés (Gold, Copper & Silver) 7 NEAR-PRODUCTION ASSETS 4 5 Four Mile (Uranium) DEVELOPMENT ASSETS 6 Isua (Iron ore) 8 2 7 Salaman
Slide 18: Kestrel Royalty, Rio Tinto, Australia
Kestrel Royalty, Rio Tinto, Australia » A Tier 1 coking and thermal coal mine in Australia operated and majority-owned by Rio Tinto » Recently completed a US$2bn capex programme to extend the mine life and increase production capacity(1) » Expected to drive Anglo Pacific’s EBITDA growth over the com
Slide 19: Anglo Pacific Team
Anglo Pacific Team Kevin Flynn Peter Mason Juan Alvarez Marc Bishop Lafleche Chief Financial Officer General Counsel and Company Group Mining Analyst Investment Associate Secretary Kevin Flynn joined the Group as Chief Peter Mason joined the Group in Juan Alvarez joined the Group in Marc Bishop Lafl
Slide 20: Conclusion
Conclusion Anglo Pacific Group PLC Annual Results 2013 19
Slide 21: Conclusion
Conclusion » Opportunity to create a leading international mining royalty company focused on base metals and bulk materials » Growing royalty and stream financing market as conventional funding routes for miners remain limited » Strong existing asset base from which to develop the business » Focus o
Slide 22: Appendix: 2013 Financial Highlights
Appendix: 2013 Financial Highlights Anglo Pacific Group PLC Annual Results 2013 21
Slide 23: Financial highlights
Financial highlights FIGURES IN £M 2013 2012 (Restated) Royalty related income 14.7 15.2 (Loss)/Profit after tax (42.5) 11.6 Adjusted earnings after tax 9.1 9.4 Headline earnings per share (39.01)p 10.67p Adjusted earnings per share 8.39p 8.69p Dividend per share 10.2p 10.2p Non-cash impairment char
Slide 24: Income from royalties
Income from royalties FIGURES IN £M 2013 2012 Kestrel 9.9 10.9 EVBC 2.0 1.8 EVBC (other income) 2.0 - Amapa 0.7 2.2 Crinum * - 0.1 Royalty related income 14.7 15.2 » Kestrel: Underlying income was £9.9m (A$16.1m) compared to £10.9m (A$16.7m) in 2012 » EVBC: £2.0m received on the back of increased go
Slide 25: Adjusted earnings
Adjusted earnings 2013 2012 (RESTATED) EARNINGS (£M) EPS (P) EARNINGS (£M) EPS (P) Earnings after tax (42.5) (39.01) 11.6 10.67 Adjustment for: Impairment of mining and exploration interests 26.3 11.4 Impairment of intangibles - royalties 8.3 - Loss/(Gain) on revaluation of coal royalties 13.6 (9.5)
Slide 26: Net asset reconciliation
Net asset reconciliation CHANGE(£M) NET ASSETS(£M) PER SHARE(P) Net assets as at January 1, 2013 301.0 275 Kestrel - Foreign exchange (26.0) - Underlying valuation (13.6) - Deferred tax 11.9 (27.7) Intangibles - Foreign exchange (7.3) -Impairment (8.3) (15.6) Royalty instruments (debentures) - Forei
Slide 27: Cashflow analysis
Cashflow analysis 40 12.6 0.8 35 3.2 30 3.8 25 24.0 2.1 20 9.4 £ million 2.5 RCF 11.1 RCF 15 15.7 6.6 10 5 0 Anglo Pacific Group PLC 26
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