(Alliance News) - Mining royalty firm Anglo Pacific Group PLC on Monday announced a further investment into a Canadian iron ore royalty company.
Anglo Pacific is to invest a further USD7.1 million into Labrador Iron Ore Royalty Corp, meaning it has now invested some USD70 million, giving it a 5.9% stake.
LIORC is listed in Toronto, with a market capitalisation of around CAD1.7 billion. It derives its own income from the Labrador iron ore mine in Canada, which is owned by blue-chip firm Rio Tinto PLC.
Anglo Pacific Chief Executive Julian Treger said: "The global sell-off in the equity markets at the beginning of third quarter 2019 provided an attractive entry point for Anglo Pacific to opportunistically add to its LIORC position as we considered the underlying fundamentals of the royalty and iron ore product fitted within our return requirements at such price levels.
"In this respect, we have made what we believe to be conservative assumptions about the iron ore and pellet prices going forward. The acquisition is immediately cash generative and will be accretive to our earnings in financial 2019 and beyond."
"We will continue to opportunistically add to our position depending on the share price and our own liquidity, in the meantime we will allocate our cash towards shareholder returns, repaying our borrowings and making other royalty acquisitions to continue the considerable progress we have made in diversifying our sources of income," added Treger.
Anglo Pacific shares were 1.7% higher on Monday morning in London at 196.18 pence each.
