Final Results

Anglo Pacific Group PLC 28 February 2005 Anglo Pacific Group PLC 28 February 2005 Anglo Pacific Group PLC Preliminary Results for the twelve months ended 31st December 2004 Anglo Pacific Group PLC (APG), the natural resources royalties company, today announces record preliminary results for the year ended 31st December 2004. Financial Highlights • Profit before tax increased 88% to £7,712,000 (2003: £4,109,000) • Proposed final dividend increased by 54% to 2.00p per share (2003: 1.30p) • Total dividend for the year increased by 38% to 3.60p (2003: 2.60p) • Coal royalties for the year increased by 57% to £5.3 million (2003: £3.4 million) • Australian coal royalty independent valuation increased by 30% to £57.6 million • Cash and strategic Investments increase by 114% to £24 million • Earnings increased by 93% to 7.15p per share (2003: 3.70p) • £39 million of unused tax losses Operational Highlights • The Company's interests in the Groundhog and Trefi Coal Deposits in British Columbia, Canada increased from 65% to 100% • Acquisition of further additional new coal rights and tenancies in British Columbia at minimal cost of licence applications and registrations • Several New Coal opportunities in Australia resulting from Core Resources joint venture • Merritt Coal Bed Methane project in British Columbia continuing • Record Royalty Flows from Private Ground expected in 2005 • Coking Coal prices expected to remain buoyant due to sustained Chinese, Indian, Far East and other international demand Commenting on the preliminary results, Peter Boycott, Chairman of Anglo Pacific said: 'I am pleased to be able to report continued progress at Anglo Pacific Group during the twelve months to 31st December 2004. The year under review produced record results for the Company due to its increased focus on coal and other energy products where global demand has seen prices improve sharply over the year. The Company's strategy still remains to acquire projects that expect to yield dividend and royalty cashflow as well as asset appreciation in the next few years. In October 2004 the Company took the opportunity to raise £3.5 million for further working capital. Development of the Company's Canadian and Australian coal interests is now a priority due to the continuing demand for coal energy from China, India and the Far East and the Board expects to receive record coal royalties this year from its interests in Queensland, Australia. With the encouraging outlook for coking coal prices for 2005, and several years further forward, the Board looks to the future with confidence.' Enquiries: Brian Wides / Peter Boycott Anglo Pacific Group PLC 020 7409 1111 Stephen Scott / James Harris Scott Harris 020 7618 6433 Chairman's Review Group profits before tax for the year ended 31st December 2004 were £7,712,000 compared to £4,109,000 for the previous year. Profits after tax increased by 98% to £6,402,000 (2003: £3,240,000) with earnings per share for the year of 7.15p (2003: 3.70p). The Group has realised capital gains from its mining interests of £3,507,000 (2003: £1,360,000). I am pleased to announce a final dividend of 2.00p per share for the year ended 31st December 2004 which with the interim dividend of 1.60p per share paid on 28th January 2005 will make a total for 2004 of 3.60p per share (2003: 2.60p). The Board proposes to pay the final dividend on 5th August 2005 to shareholders on the Company's share register at the close of business on 24th June 2005. As with the interim dividend shareholders will be given the opportunity to elect to receive a scrip dividend instead of cash. On average, since the scrip dividend was available to shareholders, over a third have chosen to take scrip instead of cash. The Board is appreciative of this vote of confidence in the Company. The Company's directors have also elected to take scrip instead of cash in respect of most of their holdings. In October 2004 the Company took the opportunity to raise £3.5 million after expenses by placing 4.4 million shares at 81.75p per share for further working capital. The Board has decided that with the recent interest in coal and coal energy companies worldwide it is in the best interests of the Company and shareholders to seek a quotation on the Toronto Stock Exchange whilst maintaining the full London quote. Shareholders will be kept informed of the progress of the application. Our coal royalty interests have been independently valued at £57.6 million as at 31st December 2004 which is £13.3 million more than the valuation at 31st December 2003. The Company continued to participate in financings of various mining opportunities. Our mining interests and quoted stakes in coal, coal energy, uranium and other metal projects were valued at 31st December 2004 at £20.2 million. This included an unrealised profit over book value of £7.4 million in addition to the realised gains referred to earlier. The Company also had cash of £3.8 million at 31st December 2004. Operational Review Coal Energy Interests Coal Royalties In Australia, coal royalty receipts from the Kestrel and Crinum mines, operated by Rio Tinto and BHP Billiton respectively, were £5,313,000 (2003: £3,376,000). The independent valuation of these interests at the year-end was A$141.3 million (£57.6 million) compared to A$105.2 million (£44.3 million) at 31st December 2003 and is based on the net present value of the pre-tax cashflow discounted at a rate of 7%. The net royalty income is taxed in Australia at a rate of 30%. The change in the valuation compared to last year has been adjusted to revaluation reserve. Our coal royalty is computed by reference to Queensland Government legislation which resulted in an increase in the rate of royalty from 4% to 7% in April 2000. The legislation applies to both ground owned by the Crown and certain other privately owned areas in which the Company participates. During 2004 mining output increased from the private area of the coal deposits. In 2005 this is expected to continue with record royalty flows for the Company anticipated. During 2004 the Company has sought to take advantage of the distinct shift in sentiment away from gold and precious metals towards base metals, coal, coal energy, oil and uranium. Consequently your Company has increased substantially its exposure to coal and coal energy products with particular emphasis on coking or metallurgical coal. The price rises achieved by suppliers of coking coal in the last twelve months have started to be reflected in the values of the Company's interests. Recent published prices of supplier contracts of coking coal have been agreed at over 120 US$ per ton compared to prices at half that level a year ago. A major US investment bank stated in a recent report that it expected coking coal supplies to remain tight through to 2008 leading to significant upward pressure on prices. Coal Deposits In line with this strategy the Company has again expanded its holdings in its Canadian coal deposits in British Columbia by increasing from 65% to 100% its interests in the Groundhog and Peace River projects. Furthermore, by staking more ground near and around these projects the Company has strengthened its position in these major strategic coal fields. The outlook for the potential joint venture development of these resources remains very encouraging due to the continuing global demand for Canadian coal products especially from China, Japan and the Far East. The Company's decision to seek a listing on the Toronto Stock Exchange (TSX) is expected to greatly enhance the ability to take these projects forward. Coal Bed Methane The Company still owns a circa 15% interest in the Merritt coal and coal bed methane project in British Columbia. Coal bed gas prices have again risen during 2004 and the Company's interests are now held through its holding in Forum Development Corporation which is quoted on the TSVX. This company has also recently acquired some uranium interests. Cambrian Mining The Company now owns circa 6% of Cambrian Mining (listed on AIM) as well as a direct holding in Western Canadian Coal (listed on the TSX), a new operating coal producer in British Columbia, Canada. Cambrian owns circa 43% of Western Canadian Coal and a 27% stake in Asia Energy (listed on AIM), in addition to being entitled directly to a one US$ per ton royalty on all coal produced at Asia Energy's Phulbari coal project in Bangladesh. The Company has recently participated in placings by both Cambrian and Western Canadian Coal where the latter raised C$115 million for working capital to ramp up coal production at Western Canadian Coal's projects in British Columbia. Core Resources In September 2004 the Company announced a joint venture relationship with Core Resources, a private Australian based resources group, to identify mining opportunities in Australia as well as carrying out detailed investigations into a potential new coal area in Northern Australia. This project was recently identified by Conarco Minerals Pty Ltd (Conarco), a private company which includes amongst its shareholders, John Collier, a former senior executive of Rio Tinto in Australia. Conarco retains an active interest in these tenements. Other Metal Interests The Company still retains substantial investments, albeit at a reduced level, in various gold, diamond and platinum projects based mostly in North America and Australia. As already indicated and in the light of the continuing global demand especially in the Far East, the Company's policy is to concentrate more on base metals and uranium. In this respect the Company's strategy still remains to acquire projects that expect to yield dividend and royalty cashflow as well as asset appreciation in the next few years. During 2004 the Company has taken profits on a number of its quoted gold investments whilst still retaining, inter alia, holdings in Kirkland Lake Gold, Uruguay Minerals, Starfield Resources and Muscox Minerals but at reduced levels. The Company remains a supportive and substantial shareholder in Hidefield Gold, Aquiline Resources and Alto Ventures where it has had disclosable stakes. The Company retains a 16% interest in Platinum Australia where progress has been made on three challenging and substantial platinum projects in South Africa. The process technology associated with the Panton project in Australia remains a valuable asset for Platinum Australia in developing these recently acquired interests. In September 2004 the Company announced a circa 9% interest in Laramide Resources which owns the Westmoreland-Lagoon Creek uranium deposit in Australia where, according to Laramide, 28% of the world's known recoverable resources of uranium exist. Uranium prices have improved substantially in the past 18 months, with spot prices rising from below US$10 per lb to current levels of around US$20 per lb. This holding is in line with the Company's strategy of increasing its exposure to energy products and is one of a number of uranium interests acquired in recent months. Information on some of these projects and our other mining interests can be found on the Group's website at www.anglopacificgroup.com as well as on the relevant mining company's own website. Due to continuously altering equity holdings and important commercial and project viability considerations, the Company has decided to no longer publish its attributable underlying asset positions. Talc The Board continues to negotiate improvements to the leases of this project and remains committed to joint venture this interest when appropriate. Strategy The Company's strategy remains to pay a substantial proportion of the coal royalty as dividends to shareholders whilst pursuing an active mining participation policy. The Board's mining operations and joint ventures are still concentrated in North America, Australia and Western Europe. Profits from these operations should be shielded from tax by the Company's tax losses. The Company's main focus is now on coal energy and base metals including uranium. Development of the Company's Canadian and Australian coal interests is now a priority due to the continuing demand for coal energy from China, India and the Far East. Outlook The Board expects to receive record coal royalties this year from its interests in Queensland, Australia. With the encouraging outlook for coking coal prices for 2005, and several years further forward, the Board looks to the future with confidence. Finally I wish to thank shareholders for their support over the last year as well as extending my thanks to our hard working directors and staff. P.M. BOYCOTT Chairman 28th February 2005 CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31st DECEMBER 2004 2004 2003 £000's £000's Turnover 5,313 3,376 Cost of sales - - ------- ------- Gross profit 5,313 3,376 ------- ------- Administrative expenses (1,316) (849) Other operating income 122 106 ------- ------- Operating profit 4,119 2,633 ------- ------- Profit on sale of fixed asset investments 3,507 1,360 Interest received 86 116 ------- ------- Profit on ordinary activities before tax 7,712 4,109 Taxation on ordinary activities (1,310) (869) ------- ------- Profit for the financial year 6,402 3,240 Dividends: Interim (1,513) (1,137) Final (1,892) (1,146) ------- ------- Retained profit for the financial year 2,997 957 _______ _______ Earnings per ordinary share 7.15p 3.70p Diluted earnings per ordinary share 7.10p 3.66p ____ ____ STATEMENT OF TOTAL RECOGNISED 2004 2003 GAINS AND LOSSES £000's £000's Retained profit for the financial year 2,997 957 Unrealised revaluation of Australian royalty interests 13,353 15,582 Currency translation surplus on foreign currency investments 16 22 _______ _______ 16,366 16,561 _______ _______ Turnover and operating profit are derived from the Group's continuing operations. CONSOLIDATED BALANCE SHEET AT 31st DECEMBER 2004 2004 2003 £000's £000's Fixed assets Tangible assets 852 846 Investments 69,984 50,342 ------- ------- 70,836 51,188 Current assets Debtors 2,580 1,052 Cash at bank and in hand 3,763 1,642 ------- ------- 6,343 2,694 Current liabilities Creditors-amounts falling due within one year (4,984) (2,662) ------- ------- Net current assets 1,359 32 ------- ------- Total assets less current liabilities 72,195 51,220 Long term liabilities Provisions for liabilities and charges (370) (224) ------- ------- 71,825 50,996 _______ _______ Capital and reserves Called up share capital 1,891 1,749 Share premium account 4,741 420 Revaluation reserve 55,935 42,582 Foreign currency translation reserve 119 103 Special reserve 632 632 Profit and loss account surplus 8,507 5,510 ------- ------- Equity shareholders' funds 71,825 50,996 _______ _______ CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31st DECEMBER 2004 2004 2003 £000's £000's £000's £000's Net cash inflow from operating activities 3,678 2,690 Returns on investments and servicing of finance Interest received 86 116 ________ ________ Net cash inflow from returns on investments and servicing of finance 86 116 Taxation Overseas tax paid (1,027) (1,614) UK Income tax - - ________ ________ (1,027) (1,614) Capital expenditure and financial investment Payments to acquire tangible fixed assets (15) (14) Receipts from sales of tangible fixed assets - - Sale of equity investments 8,647 3,613 Purchase of equity investments (11,429) (5,390) ________ ________ Net cash (outflow) from capital expenditure and financial investment (2,797) (1,791) Acquisitions and disposals - - ________ ________ Net cash (outflow) before financing (60) (599) Financing Issue of ordinary share capital 3,760 - Dividends paid (1,579) (1,525) ________ ________ Net cash inflow/(outflow) from financing 2,181 (1,525) ________ ________ Increase/(decrease) in cash 2,121 (2,124) ________ ________ NOTES 1. Earnings per ordinary share is calculated on the Group's profit after tax of £6,402,000 (2003 - £3,240,000) and the weighted average number of shares in issue during the year of 89,575,628 (2003 - 87,462,955). The diluted earnings per ordinary share is calculated on a profit after tax of £6,402,000 and 90,189,475 shares. 2. The above figures do not constitute full accounts within the meaning of Section 240 of the Companies Act 1985. The figures for the year ended 31st December 2003 constitute abridged accounts extracted from the published accounts for the year which have been filed with the Registrar of Companies and on which the auditors' report was unqualified. The audit opinion on the accounts for the year ended 31st December 2004 has not yet been signed. This information is provided by RNS The company news service from the London Stock Exchange

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