Anglo Pacific Group Plc Value Analysis 2016 (LSE:APF)

Anglo Pacific Group Plc Value Analysis 2016 (LSE:APF)

Anglo Pacific makes money by providing capital to mining companies in return for an income stream when the mine starts selling product.  This is the second time we have done value analysis on APF.

The single largest source of revenue for APF is from coal mines in Australia.  The largest revenue from APF’s coal royalties comes from the
Kestrel coking coal mine in Queensland.  APF has other producing assets in gold, vanadium and uranium in different geographical locations.  APF also has some royalties on projects that are not yet in production.  These other assets are likely to provide revenue at some point.

The opportunity for value investors comes as a result of the current relationship between price and book value.  APF at current prices is worth roughly the same as the accounting value of the company.  No value is currently ascribed to the earning power of the assets.

The low price to asset value of the company comes after two years of significant reductions in the valuation of the assets.  The prior reductions in the asset values make APF particularly interesting.

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