Anglo Pacific agrees to sell royalty from Narrabri mine, exit from thermal coal
Published: 02:30 14 Oct 2021 EDT
Anglo Pacific Group PLC (LSE:APF, TSX:APY, OTC:AGPIF) has agreed to sell its 1% gross revenue royalty over the Narrabri mine in Australia to the operator, Whitehaven Coal Limited (ASX:WHC), for up to US$36mln (£26mln), marking its exit from thermal coal.
The sale improves the group's carbon footprint with a remaining portfolio of assets now increasingly weighted towards cobalt, vanadium, copper and nickel - commodities which will be essential to decarbonise energy generation in the years ahead, it said.
Anglo Pacific will receive fixed payments totalling US$21.6mln, along with contingent payments which could generate a further US$14mln.
The transaction is expected to close on December 31 and the company will continue to receive royalties from Narrabri until the end of the current calendar year. The group expects to receive about US$1-2mln in the second half from Narrabri royalty income.
"I am delighted to announce that we have entered into an agreement to sell the Narrabri thermal coal royalty, which is aligned with our strategy and represents a further step in focusing on the investment in 21st century commodities supporting a more sustainable world,” said chief executive Julian Treger.
“This transaction is consistent with our stated strategy of moving away from carbon-based energy exposure, as demonstrated by our investments in copper, nickel, vanadium, uranium and most recently the transformational US$205mln Voisey's Bay cobalt stream acquired earlier this year.
“We intend to deploy the proceeds from this transaction into further acquisitions, including to partially fund the upcoming US$20mln Incoa calcium carbonate financing which is likely to occur in H1 2022," he concluded.
Whitehaven was selected as the preferred bidder following a competitive sales process.
