Tucano Iron Ore, Brazil (1% GRR)
On January 24, 2013, Beadell Resources Ltd ("Beadell") announced that the magnetic separation plant is due to produce first concentrate in April 2013. Beadell previously announced on August 24, 2012 an "Iron Ore Concentrate Off-take Agreement" with Anglo Ferrous Amapa Mineracao Ltda with an indicated production level of 500,000 tonnes per annum of approx. 65% Fe concentrate. For further information please see www.beadellresources.com.au.
Araguaia Nickel, Brazil (Variable NSR)
Horizonte Minerals Plc ("Horizonte") announced on the August 22, 2012 that its NI 43-101 compliant Preliminary Economic Assessment ("PEA") showed strong economics based on a low strip ratio, excellent infrastructure, large mineral resource with two viable alternatives for processing. The PEA recommended moving to pre-feasibility which Horizonte expected to begin in Q4 2012. Anglo Pacific holds an option on a sliding scale 1.1% to 1.5% NSR royalty to be exercised for US$12.5million by the earlier of 120 days from the completion of a pre-feasibility study or January 10, 2017. Further information can be found at www.horizonteminerals.com and www.sedar.com.
In addition, the Group completed the previously announced Mount Ida royalty agreement and acquired an option on a uranium project in the United States.
The Group announced in December the signing of a royalty financing agreement with Hummingbird Resources Plc to acquire a 2% NSR royalty on its Dugbe 1 gold project in Liberia.
Together with other development royalties, these latest acquisitions further strengthen the Group's royalty portfolio and should deliver future value and growth.
Review of results
Income statement
---------------------------------------------- RestatedRoyalty entitlements GBP '000 2012 2011----------------------------------------------Kestrel 10,921 26,083Crinum 117 5,902Amapa 2,229 2,694----------------------------------------------Royalty income 13,267 34,679----------------------------------------------El Valle-Boinas/Carles (i) 1,890 275----------------------------------------------Royalty entitlements 15,157 34,954----------------------------------------------(i) El Valle-Boinas/Carles is a debenture instrument whereby initial royaltyreceipts are repayments of principal and therefore do not appear as royaltyincome in the income statement.
Royalty income was GBP 13.3 million for the year ended December 31, 2012, down from GBP 34.7 million in 2011. The 2011 numbers have been restated as a result of the previously announced misallocation of royalty revenue at the Group's Kestrel royalty which came to light after an audit by the Queensland Office of State Revenue. This restatement is discussed further in note one, but resulted in a reduction in the reported Kestrel income in 2011 of GBP 0.4 million.
As discussed in the royalty review, there were several adverse production occurrences at Kestrel in the year, resulting in unusually low levels of income. Overall income has also been adversely impacted by continued downward pressure on the coking coal price throughout 2012. Production at Crinum had largely left the Group's private royalty ground in the first half of 2011, and no future royalty receipts are now expected. El Valle-Boinas/Carles continued its ramp up to full production in the year, though as this royalty was structured as a debenture originally, royalty receipts are treated as repayments of principal, until such time as the outstanding balance has been repaid. From 2013 onwards, these royalty receipts will be included in the income statement.
