Anglo Pacific Group PLC US$2 million share subscription into Brazilian Nickel
to accelerate development of Piauí Nickel Project
Anglo Pacific Group PLC (“Anglo Pacific” or the “Company”) (LSE: APF, TSX: APY), is pleased to announce that it is acquiring an approximately 2.1% equity stake in Brazilian Nickel Limited (“BRN”) at an investment cost of US$2 million (approximately £1.5 million). Each BRN share is valued at £0.45.
The investment is part of a wider US$27.5 million funding led by TechMet Limited (“TechMet”), with funds they have received as part of a significant equity investment from the U.S. International Development Finance Corporation (“DFC”), as part of the anticipated acceleration of the development of Brazilian Nickel’s Piauí Project (the “Project”).
Highlights
- The investment underlines Anglo Pacific’s confidence in the growth potential of the Project, over which the Company has a 1.25% gross revenue royalty (“GRR”) with the option to acquire an incremental 3.0% GRR for US$70 million (total royalty entitlement of 4.25%) (the “Upsize Option”) at the time of PNP24k Project construction decision.
- The involvement of a highly regarded investor such as TechMet (with the backing of the DFC), is a very positive signal of the technical viability of the Project and a recognition of the robustness of Anglo Pacific’s original royalty investment thesis.
- BRN will accelerate the Project’s development by directing substantially all of the proceeds to completing a definitive feasibility study for the full scale Piauí Project as well as expanding its demonstration plant to provide early small scale production from the PNP1000 project
- Under Anglo Pacific’s existing 1.25% GRR, the investment which cost US$2 million in 2017 is expected to contribute US$4.3 million per annum once fully ramped up, and US$67.2 million over the life of mine assuming a long term nickel price of 17,848 per tonne.
- If the Company decides to exercise its Upsize Option, the royalty on the Project is expected to initially contribute US$14.5 million per annum once fully ramped up, and US$228.0 million over the life of mine assuming a long term nickel price of 17,848 per tonne.
- The investment is part of the Company’s continuing strategy to invest in commodities which form part of new technologies which contribute to reducing the world’s carbon footprint and supporting a more sustainable world.
Julian Treger, Chief Executive Officer of the Company, commented:
“We are very pleased to invest a further ~US$2 million into BRN which will help to accelerate the Piauí Project which, if the Company decides to exercise its option to increase the GRR to 4.25%, has the potential to generate US$14.5 million per annum of GRR once fully ramped up in the middle of the decade, providing meaningful income to the portfolio as we continue on the path of portfolio diversification. The involvement of TechMet, in whom the US Government recently became a significant shareholder, is a very positive signal of the technical viability of the Project and a recognition of the robustness of Anglo Pacific’s original royalty investment thesis.
This share subscription is part of our continuing strategy of investing in commodities that support a more sustainable world and which form part of new technologies which contribute to reducing the world’s carbon footprint including vehicle electrification. BRN’s anticipated nickel and cobalt products are aligned with this strategy as the Project is expected to produce high purity nickel and cobalt hydroxide intermediates which can be used in lithium ion batteries as well as traditional nickel end user markets.”
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