LONDON (Alliance News) - Anglo Pacific Group PLC said Monday its Kestrel mine investment could boost output beyond the market's expectations, enabling the possibility of higher dividends in the future.
The mining royalty firm said Kestrel, in Queensland, Australia, could increase output as much as 10% above market consensus of 5.2 million tonnes in 2019.
It is currently talking with operators EMR Capital and Adaro Energy to validate this guidance and then come up with a mining plan.
Kestrel is expected to have contributed between GBP9 million and GBP10 million in revenue to Anglo Pacific in the fourth quarter of 2018, its third highest quarterly contribution ever.
For all 2018, Anglo Pacific as a whole expects to report revenue of between GBP48 million to GBP50 million, up from GBP42.4 million in 2017. Most of this is from royalties, and the rest from a financing agreement.
Its Maracas Menchen vanadium mine investment in Brazil is set to contribute GBP5 million to GBP6 million, a record, while its Labrador Iron Ore Royalty Corp investment has also done well.
Anglo Pacific's dividend will be at least 7 pence per share, having already paid 4.875p of that. In 2017, its total payout was 7p.
Chief Executive Julian Treger said it ended 2018 in a "very positive" position, with commodity prices doing well in its sectors.
Any increase in output from Kestrel would subsequently boost Anglo Pacific's revenue, he said, which would enable the possibility of higher dividends going forward.
Shares were up 5.2% on Monday at a price of 152.52p each.