Investing in Royalties March 2013
Important Notice and Disclaimer Certain statements in this presentation, other than statements of historical fact, are forward-looking By its nature, this information is subject to inherent risks and uncertainties that may be general or statements based on certain assumptions and reflect the Company’s expectations and views of future specific and which give rise to the possibility that expectations, forecasts, predictions, projections or events. Forward- looking statements (which include the phrase “forward - looking information” within the conclusions will not prove to be accurate; that assumptions may not be correct and that objectives, meaning of Canadian securities legislation) are provided for the purposes of assisting the reader in strategic goals and priorities will not be achieved. A variety of material factors, many of which are understanding the Company’s financial position and results of operations as at and for the periods ended beyond the Company’s control, affect the operations, performance and results of the Company, its on certain dates, and to present information about management’s current expectations and plans businesses and investments, and could cause actual results to differ materially from those suggested relating to the future. Readers are cautioned that such forward-looking statements may not be any forward-looking information. For additional information with respect to such risks and appropriate for other purposes than outlined in this presentation. These statements may include, uncertainties, please refer to the “Risk Factors” section of our most recent Annual Information Form without limitation, statements regarding the operations, business, financial condition, expected financial available on www.sedar.com and the Group’s website www.anglopacificgroup.com. If any such risks results, cash flow, requirement for and terms of additional financing, performance, prospects, actually occur, they could materially adversely affect the Company’s business, financial condition or opportunities, priorities, targets, goals, objectives, strategies, growth and outlook of the Company results of operations. The reader is cautioned that the list of factors noted in the section herein entitled including the outlook for the markets and economies in which the Company operates, costs and timing of “Risk Factors” is not exhaustive of the factors that may affect the Company’s forward -looking acquiring new royalties, mineral reserve and resources estimates, estimates of future production, statements. The reader is also cautioned to consider these and other factors, uncertainties and production costs and revenue, future demand for and prices of precious and base metals and other potential events carefully and not to put undue reliance on forward-looking statements. commodities, for the current fiscal year and subsequent periods. In addition, statements relating to “reserves” or “resources” are forward looking statements, as they involve implied assessment, based on This presentation also contains forward-looking information contained and derived from publicly certain estimates and assumptions, that the resources and reserves described can be profitably produced available information regarding properties and mining operations owned by third parties. The in the future. Company’s management relies upon this forward -looking information in its estimates, projections, plans, and analysis. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as “expects”, “anticipates”, “plans”, “believes”, Although the forward-looking statements contained in this presentation are based upon what the “estimates”, “seeks”, “intends”, “targets”, “projects”, “forecasts”, or negative versions thereof and other Company believes are reasonable assumptions, there can be no assurance that actual results will be similar expressions, or future or conditional verbs such as “may”, “will”, “should”, “would” and “could”. consistent with these forward-looking statements. The forward-looking statements made in this Forward-looking statements are based upon certain material factors that were applied in drawing a presentation relate only to events or information as of the date on which the statements are made conclusion or making a forecast or projection, including assumptions and analyses made by the Company and, except as specifically required by law, the Company undertakes no obligation to update or revise in light of its experience and perception of historical trends, current conditions and expected future publicly any forward-looking statements, whether as a result of new information, future events or developments, as well as other factors that are believed to be appropriate in the circumstances. The otherwise, after the date on which the statements are made or to reflect the occurrence of material factors and assumptions upon which such forward-looking statements are based include: the unanticipated events. general economy is stable; local governments are stable; interest rates are relatively stable; equity and debt markets continue to provide access to capital; the ongoing operations of the properties underlying This presentation contains reference to past prices of and/or yields on the Company’s shares. Readers the Company’s portfolio of royalties by the owners or operators of such properties in a manner are reminded that past performance cannot be relied on as a guide to future performance. consistent with past practice; the accuracy of reserve and resource estimates, grades, mine life and cash cost estimates; the accuracy of public statements and disclosures made by the owners or operators of such underlying properties; no material adverse change in the market price of the commodities that underlie the Company’s portfolio of royalties and investment interests; no adverse development in respect of any significant property in which the Company holds a royalty or other interest; the successful completion of new development projects; the accuracy of publicly disclosed expectations for the development of underlying properties that are not yet in production; planned expansions or other projects within the timelines anticipated and at anticipated production levels; and title to mineral properties. Forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions, which could cause actual results to differ materially from those anticipated, estimated or intended in the forward-looking statements.
1. Overview of Anglo Pacific
Who we are: Anglo Pacific is the only mining royalty company listed on the LSE • Broad commodity exposure including: - Steel raw materials (hard coking coal, iron ore, chromite) - Energy (uranium, thermal coal) - Precious metals (gold, PGM) - Base metals (copper, nickel) • Focused on countries with a good legal jurisdiction • No gearing or hedging • Strong cash flow and earnings on long life projects • Progressive dividend policy 3
What we offer: An alternative source of finance to mining companies from which our shareholders get: • Top line exposure to mining company revenues • Reduced exposure to cost inflation and reduced balance sheet risk • Opportunity to benefit from ongoing growth in mineral resources • Diversification across commodities • Security of a portfolio of established mining operations 4
How we do it: Acquire existing royalties from third parties • Four Mile Uranium (1% NSR) acquired from IMX Resources in May 2009 • Amapà Iron Ore (1% GRR) acquired from Beadell Resources in December 2010 • Ring of Fire Chromite (1% NSR) acquired from KWG in August 2011 Establish new royalty agreements with the current operator (for cash) • El Valle Copper & Gold (2.5% NSR) agreed with Kinbauri in March 2008 • Jogjakarta Iron (2% NSR agreed with Indo Mines in June 2009 • Isua Iron Ore (1% GRR) agreed with London Mining in August 2011 5
Current royalty portfolio 6
Commodity exposure at December 31, 2012 Royalty Interests Strategic Mining Interests (£266m) (£56m) Coking Coal 65% Copper 4% Coking Coal 73% Coking Coal 64% Gold Gold 30% 28% Gold 5% Iron Ore 19% Iron Ore Nickel 15% 24% Other Iron Ore 9% Uranium Other 7% 18% Gold 2% 6% Platinum Group Gold 5% Chromite Gold Metals 2% Uranium Iron Ore 5% 26% 6% 14% Uranium 19% Iron Ore 23% Uranium 2% Oil & Gas 4% 16% Coal 100% 7 Note – Unlisted investments included at cost
Building the portfolio: We focus on: • Long term projects – 10 years plus • Experienced and reputable mining operators • Good legal jurisdictions • Diversification of commodities with good pricing visibility • Open ended projects with potential blue sky 8
Progress to date: 330 500 280 400 230 Pence per share 300 180 £ million 130 New: New: New: 200 New: - Ring of - Mount Ida - Beverly - Railway Fire - Churchrock - Four Mile - Amapa - Isua - Hummingbird 80 - Highbank - Tucano - Eastbank - Bulqiza - Midway 100 - Araguaia New: McKenzie 30 - El Valle - Salamanca - Engenho - Jogjakarta 0 -20 31.12.08 31.12.09 31.12.10 31.12.11 31.12.12 Coal royalties Other royalty investments Cash and Investments Other assets Valuation of royalties NAV per share Adjusted NAV per share 9
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