LONDON (Alliance News) - Anglo Pacific Group PLC Friday said the royalties from the Kestrel underground mine in Australia will be lower than expected in the first half of 2016 and heavily weighted to the second half, but said its full year expectations remain unchanged.
Anglo Pacific Group owns a stake in certain land areas of the Kestrel project that is operated by mining major Rio Tinto PLC, and therefore only receives royalty payments when mining is being conducted over those specific areas.
Anglo Pacific's original guidance for Kestrel was for 30% to 35% of overall mining to be conducted in its royalty areas in the first half of 2016 followed by a rise in the second half when it expects 85% to 90% of mining to happen within its land areas.
Overall, Anglo Pacific said 60% to 65% of overall mining throughout 2016 would happen within its royalty lands.
However, on Friday, the company said there has been a delay in the start of mining the longwall which lies within its royalty area, which means that area will not be mined until the second half of this year.
As a result, only 20% to 25% of overall mining operations at Kestrel will fall into Anglo Pacific's royalty areas in the first half - but the guidance covering the second half of the year remains unchanged.
Despite reiterating guidance for the second half and lowering guidance for the first, Anglo Pacific said it still expects 60% to 65% of overall mining in 2016 to land within its royalty areas as the company sticks to its original target.
Anglo Pacific shares were down 5.3% to 84.50 pence per share on Friday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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