Ecora Royalties Plc · LSE:ECOR
Ecora Royalties — Anglo Pacific Group — Merger or Acquisition (February 2017)
27 slides from Ecora Royalties's merger presentation, February 2017
Slide 1: Acquisition of Denison Mines' attributable portion of toll milling revenues and associated financing
Anglo Pacific Group PLC February 2017 Acquisition of Denison Mines’ attributable portion of toll milling revenues and associated financing
Slide 2: Important disclaimer
Important disclaimer This presentation is confidential and is being provided to you solely for your information and may not be reproduced or redistributed (in whole or part) to any other person for any purpose. This presentation has been prepared by and is the sole responsibility of Anglo Pacific Gr
Slide 3: Transaction
Transaction Anglo AngloPacific PacificGroup GroupPLC PLC Annual Results 2013 3
Slide 4: Introduction
Introduction Key Highlights Transaction Summary Immediately accretive to adjusted EPS and dividend cover » Financing related to TSX-listed Denison Mines’ (“Denison”) attributable portion of toll revenues generated from its 22.5% Toll milling revenue expected to provide stable cashflow ownership
Slide 5: McClean Lake Mill & Cigar Lake Mine Overview
McClean Lake Mill & Cigar Lake Mine Overview Located in the Athabasca Basin, Canada, an established U3O8 uranium jurisdiction. McClean Lake Mill Overview (1) Location (1) (3) » Joint venture between subsidiaries of AREVA SA (EV c.US$9.6bn) (70.0%), KEY Denison Mines (EV c.US$409m) (22.5%), and Overs
Slide 6: McClean Lake Mill & Cigar Lake Mine Overview (Cont'd)
McClean Lake Mill & Cigar Lake Mine Overview (Cont’d) Toll milling proceeds as of 1 July 2016 subject to Denison Financing and Anglo Pacific is in a position to benefit from the Phase II mine expansion, which currently has Inferred Mineral Resources of c.17% grade and 93 Mlbs contained U 3O8. Foreca
Slide 7: Well Positioned on the Global Uranium Cost Curve
Well Positioned on the Global Uranium Cost Curve The transaction enhances Anglo Pacific’s current exposure to low-cost U3O8 operations. Forecast 2017E U3O8 Cost Curve Position (1) Forecast 2020E U3O8 Cost Curve Position (1) (Business Costs, US$/lb U3O8) (Business Costs, US$/lb U3O8) $80 $80 $60 Ciga
Slide 8: Denison Financing Summary
Denison Financing Summary The transaction relates to Denison’s attributable portion of toll revenues generated under a toll milling agreement for treatment of Cigar Lake ore which trigger payment of loan interest or mandatory loan prepayment, or rights under the subsequent stream. Structure: » Struc
Slide 9: Pro forma Anglo Pacific Portfolio
Pro forma Anglo Pacific Portfolio The transaction firmly establishes Anglo Pacific’s North American footprint and diversifies commodity exposure away from coal. Commodity Exposure Geographic Exposure Half Year 2016 (1) Half Year 2016 (1) Coking coal (2) 56.6% Australia 85.0% Thermal coal (2) 22.3% S
Slide 10: Further Diversified Royalty Income and Asset Base
Further Diversified Royalty Income and Asset Base 2016 Expected Revenue (1) Pro Forma Royalty Assets (2) Pro Forma Group FX Exposure (2) (In GBP) (In GBP) (% of producing assets) Anglo Pacific royalty income Kestrel Other AUD USD Denison toll milling revenue Denison CAD £3.2m 12% 13% £89.5m £116.8m
Slide 11: The Next Step in Anglo Pacific's Diversification Strategy
The Next Step in Anglo Pacific’s Diversification Strategy Transaction Highlights Immediately accretive to adjusted EPS and dividend cover Income backdated to 1 July 2016 Strong financial rationale Toll milling revenue expected to provide stable cashflow base to Anglo Pacific’s broader royalty
Slide 12: Sources of Funding
Sources of Funding Consideration: » C$43.5 million (~£26.4 million) in cash (1) Offering: » Placing of new ordinary shares in Anglo Pacific Group PLC (“Anglo Pacific”) to raise c.£13.7 million » C$45.2 million (£27.4 million) to fund the transaction and transaction costs expected to be satisfied as
Slide 13: Appendix A: Anglo Pacific Overview
Appendix A: Anglo Pacific Overview Anglo AngloPacific PacificGroup GroupPLC PLC Annual Results 2013 13 13
Slide 14: Anglo Pacific Investment Highlights
Anglo Pacific Investment Highlights Experienced Management Team Continued Delivery On Acquisition Targets » Management team has a proven track record in » Delivering new royalties and streams (e.g. Denison, natural resources sector Narrabri, Maracás Menchen) » Extensive structuring, technical and ca
Slide 15: Anglo Pacific Overview
Anglo Pacific Overview Description Corporate Information » Anglo Pacific is the only natural resources royalty and streaming company listed Ticker APF (LSE), APY (TSX) on the London Stock Exchange and is also listed on the Toronto Stock Exchange » Strong position from which to expand asset base Curr
Slide 16: Geographic and Commodity Exposure Across Principal Royalty and Stream Portfolio
Geographic and Commodity Exposure Across Principal Royalty and Stream Portfolio Existing Portfolio Plus Transaction Portfolio Overview (Including New Transaction) Royalty type and rate / stream Royalty / Stream Commodity Operator Location volume (1) Coking & 1 Kestrel (2) Rio Tinto Australia 7 – 15%
Slide 17: Kestrel Mine Overview (Rio Tinto, Australia)
Kestrel Mine Overview (Rio Tinto, Australia) Overview (1) Forecast 2017E Coking Coal Cost Curve Position (2) (Seaborne Hard Coking Coal, CFR Natural Market) » Low-cost coking and thermal coal mine in Australia operated and 80% owned by a subsidiary of Rio Tinto and 20% owned by Mitsui Kestrel Coal K
Slide 18: Kestrel Royalty Overview
Kestrel Royalty Overview Description Illustrative Anglo Pacific Royalty Area (3) (4) » Anglo Pacific owns an effective 50% right to a coal royalty on coal produced within Anglo Pacific’s royalty area at the Kestrel Mine 100 SERIES PANELS » Anglo Pacific royalty terms: 3.5% of value up to A$100/tonne
Slide 19: Narrabri Mine Overview (Whitehaven Coal, Australia)
Narrabri Mine Overview (Whitehaven Coal, Australia) Overview (1) Narrabri Royalty Location » Located in the Gunnedah Basin, an established mining jurisdiction in New South (New South Wales, Australia) Wales, Australia » Majority owned & operated by Whitehaven Coal (ASX:WHC) » Low-cost underground lo
Slide 20: Narrabri South Expansion Provides Significant Upside Potential
Narrabri South Expansion Provides Significant Upside Potential Whitehaven Coal is evaluating longwall panel expansion from Narrabri North into the Narrabri South lease, with drilling scheduled during FY2017 to convert existing Narrabri South Mineral Resources into Mineral Reserves. Mineral Reserves
Slide 21: Appendix B: New US$30m syndicated revolving credit facility (RCF)
Appendix B: New US$30m syndicated revolving credit facility (RCF) Anglo AngloPacific PacificGroup GroupPLC PLC Annual Results 2013 21 21
Slide 22: New US$30m syndicated revolving credit facility (RCF)
New US$30m syndicated revolving credit facility (RCF) The new facility is expected to replace the existing facility which is due to mature in February 2018 and will have an accordion feature to allow the RCF to be upsized to US$40m with the growth of the business. The addition of Investec Bank PLC i
Slide 23: Appendix C: Uranium market outlook
Appendix C: Uranium market outlook Anglo AngloPacific PacificGroup GroupPLC PLC Annual Results 2013 23 23
Slide 24: Attractive Uranium Market Outlook
Attractive Uranium Market Outlook Outlook (1) Forecast Nuclear Capacity (1) (2) (In GWe) » Uranium demand is primarily driven by nuclear power capacity which is expected to grow at CAGR (2) of 2.1% during 2015-35 period » Majority of the growth in demand is expected to come from Asia which is expect
Slide 25: Appendix D: Coal markets outlook
Appendix D: Coal markets outlook Anglo AngloPacific PacificGroup GroupPLC PLC Annual Results 2013 25 25
Slide 26: Coking and thermal coal markets performance and outlook
Coking and thermal coal markets performance and outlook Coking coal historical prices and outlook (1) (2) Thermal coal historical prices and outlook (1) (2) (US$/t, FOB Newcastle) (US$/t, FOB Newcastle) 350 140 300 Benchmark Q1 2017 contract settlement = US$285/t (3) 120 Benchmark October contract s
Slide 27: Qualifying statements and endnotes
Qualifying statements and endnotes Disclosure of technical information relating to mineral projects NI 43-101 contains certain requirements relating to the use of mineral resource and mineral reserve categories of an “acceptable foreign code” (as defined in NI 43-101) in “disclosure” (as defined in
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