StockMarketWire.com - Anglo Pacific Group's royalty income rose to £15.9-16.3m - 290% up on a year ago.

It said the increase in royalty income was mostly attributable to ~88% of sales from Kestrel within the group's private royalty land compared to 38% in H1 2016, along with a ~10% increase in total sales volumes.

Other highlights:

- Free cash flow of £18.5-19.0m generated in H1 2017 (H1 2016: £4.7m) which includes the £3.1-3.4m received as part of the Denison financing arrangement (£1.7m of which related to H2 2016)

- Significant milestone achieved at Kestrel in Q2 2017 with a royalty paid on ~95% of sales which the group expected to remain around these levels for the foreseeable future

- Fair value decline of £10.5-11.5m in relation to Kestrel, largely as a result of resource depletion

- Net debt of £0.8m at June 30, 2017 (December 31, 2016: £1.0m) including repayment, within six months, of the C$12.75m drawn as part of the Denison finance arrangement

- Cash generated in July resulted in the group returning to a net cash position

- New dividend schedule with intention to pay quarterly instalments in even tranches, although the fourth quarter dividend may be adjusted to reflect the actual level of income earned during the year

Chief executive Julian Treger said: "We are encouraged by the level of royalty income received in the first half of the year, and expect this trend to continue into the second half now that we anticipate being paid a royalty on almost all sales by Rio Tinto at Kestrel.

"Royalty income for 2017 is already ~80% of that reported for 2016 as a whole.

"However on the flip side of such strong revenue from Kestrel is that it will impact on the valuation of the asset through resource depletion.

"The level of cash generated during the first six months is also pleasing, and is already ahead of that generated in 2016 as a whole. This will allow us to repay in full the amount of borrowings drawn as part of our Denison transaction.

"With spot coking coal prices running higher than we had anticipated so far in Q3 2017, we will review the absolute level of the final dividend as part of our Q4 2017 trading update and will communicate this to the market in February 2018.

"With the full availability of our US$30m revolving credit facility, a recent strengthening of the spot coking coal price, further weakening of the pound against our income currencies and a comfortably covered dividend expected in 2017, we are in a healthy financial position with good liquidity to pursue further royalty acquisitions and provide meaningful returns to our shareholders."




At 8:06am:

[LON:APF] Anglo Pacific Group PLC share price was -2.37p at 112.63p



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