Anglo Pacific invest $20 million into industrial minerals market

Anglo Pacific Group plc (LON:APF) have seen their shares in green on the back of an interesting update provided today.

The natural resources firm said that they have invested into the industrial minerals market, in an update on Monday.

The firm noted that they are set to commit $20 million into a financing agreement, which has been secured by Incoa Performance Minerals LLC.

In return, Anglo Pacific will receive 1.23% gross revenue royalty once the mine starts producing.

Incoa are developing a calcium carbonate mine in the Dominican Republic along with a processing facility in Alabama. Incoa will produce calcium carbonate for the US market, Anglo Pacific said.

The initial $20 million investment will allow Incoa to bring its product to the market, however the offer is conditional depending on Incoa completing construction and bringing the project into production.

Julian Treger, CEO and Executive Director of Anglo Pacific Group, said:

“We are delighted to announce the opportunity to invest US$20 million into the Incoa calcium carbonate project, allowing us to expand our portfolio further to include industrial minerals. The transaction is structured such that funds are only invested when the operation is in production and generating cashflow.

The Incoa project meets many of the Group’s investment criteria, especially in relation to ESG, product quality, long mine life, attractive cost profile and, by the time the funds are invested, the project will be generating cashflow. This will further diversify our portfolio and will continue our trajectory of reduced exposure to coal.

The US$20 million Anglo Pacific Tranche 2 Commitment provides the Group with a proportionate portfolio exposure to the Dominican Republic, an established mining jurisdiction with a number of companies operating high-value assets, the most prominent of which is Barrick Gold’s Pueblo Viejo project which constitutes the largest gold mining project in Latin America.

We are also delighted to continue partnering with Orion following the previously completed Mantos acquisition.”

Anglo Pacific see Australian success

In January, the firm saw their shares in green following an impressive update.

The firm said that the Kestrel Mine, which is located in Australia has helped the firm achieve another record year of trading.

Anglo Pacific receives royalties from the Kestrel mine, and holds a vast portfolio across the globe.

The company has guided for £57 million to £59 million in royalties for 2019, which would be 16% to 20% higher year-on-year. In 2018, royalties were around £3.5 million.

The Kestrel mine performed well along side the Labrador Iron Ore Co of Canada. Anglo Pacific also received maiden royalties from the Mantos Blancos copper mine in Peru.

The company have said that they will be lifting their dividend to at least 9 pence per share for 2019 compared to 8 pence one year ago.

Shares in Anglo Pacific trade at 135p (+4.25%). 2/3/20 13:55BST.

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