Anglo Pacific a mining investor is a company I have held for about three weeks now and I have only just got around to posting about its excelent forward potential.
What I was really looking for was a play on coking coal as China just cant get enough of the stuff to build up its industrial infrastructure, and the World spot prices have risen drammaticaly which will lead to increased end profits for coal mining companies and coal mining investment companies.

I looked at a few options and this one easily came out on top not only that but it has other mining interests in its portfolio as you will see.

From last results year ending 31st DEC 2003.

HIGHLIGHTS

• Proposed Final Dividend of 1.3p per share (2002:- 0.65p)

• Total Dividends for the year increase by 49% to 2.6p (2002:-1.75p)

• Australian Coal Royalty Independent Valuation increases by 54% to 44.3
million

• Cash and Strategic Investments increases by 64% to 11.2 million

• Earnings of 3.7p per share (2002:- 4.09p) due to reduced coal royalties
on account of mining more on Crown Land than Private Ground

• Much stronger Royalty Flows from Private Ground expected in 2004

• Encouraging outlook for Coking Coal prices and Production Rates due to
Chinese, Indian and Far East demand

• Increased holding in substantial Canadian Coal Deposits in British
Columbia which are currently included in the accounts at negligible value

• Canadian Coal Bed Methane opportunity in British Columbia

• 40 million of Unused Tax Losses

Chairmens Comments.

Our coal royalty interests are independently valued at 44.3 million as of
December 2003 which is 15.6 million more than the valuation at 31st December
2002.

During the year your Company has participated in financings for a number of
strategic mining opportunities. Our mining operational interests and quoted
stakes in gold, diamond and PGM projects were valued at 31st December 2003 at
9.6 million. This included an unrealised profit over book value of 3.5 million
in addition to the realised gains referred to earlier. The Company also had cash
of 1.6 million at 31st December 2003.

The Mining Investments.

COAL ENERGY INTERESTS

COAL ROYALTIES

In Australia, coal royalty receipts from the Kestrel and Crinum mines, operated
by Rio Tinto and BHP Billiton respectively, were 3,376,000 (2002: 5,802,000).
The Company has increased its holding in its Canadian coal deposits in British
Columbia to 65% of the Groundhog and Peace River projects. The outlook for the
potential joint venture development of these resources has further improved due
to the increasing demand for coal products from China, Japan and the Far East as
well as North American domestic demand. The Groundhog and Peace River projects
are reflected in the accounts at negligible value.

COAL BED METHANE

The Company owns a circa 15% interest in the Merritt coal and coal bed methane
project in British Columbia. With coal bed gas prices having risen sharply
during 2003 joint venture discussions continue with potential partners to
progress this project.

GOLD AND PLATINUM GROUP METALS

At 31st December 2003 the Company had investments at a market value of 9.6
million in gold, diamond and platinum projects based mostly in North America and
Australia.

The Company's strategy continues to be to acquire projects that expect to yield
dividend and royalty cashflow as well as substantial share appreciation in the
next few years. The two largest strategic mining stakes of the Company are in
Kirkland Lake Gold and Platinum Australia .

• Kirkland Lake Gold is now producing gold at its Macassa mine in Northern
Ontario . Its higher market rating has resulted in a substantial capital
gain for the Company on its holding. Kirkland Lake Gold is still
discovering gold at grades in excess of 16 grams per ton and sometimes at
much higher grades and hopes to further increase gold production in 2004.
Other strategic holdings include Aquiline Resources, Starfield Resources and
Muscox Minerals.

TALC

The Board continues to look for a joint venture funding partner for the
Company's Shetland talc interests. The company intends to jointly mine this
deposit with a view to establishing a royalty flow in due course.

OUTLOOK

The outlook for coking coal prices remains extremely encouraging and, with
production at the two mines in Australia expected to be at record levels and
mostly on the private ground, the Board expects much stronger coal royalties
this year. Furthermore current spot prices are well ahead of this year's fixed
contract prices which themselves are over 25% up on the previous year.

With the weakness of the US dollar and the current demand for metals and energy
fuels worldwide driven by Chinese, Indian and Far Eastern demand, the Board is
optimistic about the opportunities for its gold, diamond, base metal and PGM
interests, as well as for the substantial coal and coal gas projects that the
Company has in Canada.

Website www.anglopacificgroup.com

I think this company is a medium to long term investment and if you are interested please DYOR and you are responsible for your buying and selling timing actions.



cheers GF.

From Edmund Jackson in the Sunday Telegraph today.
Curb the doubts, some mines are nuggets of value
Mark Twain is often quoted by cynics as saying that a mine is "a hole in the ground with a liar standing beside it".

But while you should never discard a sense of scepticism about investment, if you had been too dismissive recently, you would have missed some mouth-watering returns in the mining sector.

So what has been happening to send mining shares soaring and has the trend further to go?


Click to enlarge
The potential was established a few years ago when central banks printed money to combat the risks of deflation. That helped to boost the price of gold and other commodities, and more recently the latter have benefited from economic growth, especially in developing countries.

Enter RAB Capital, a generalist hedge fund group that has revolutionised the Aim market in mining stocks. Its strategic move is already a classic of investment history, and a 1,274 per cent gain for its Special Situations fund last year shows the merits of a flexible approach. (These were some of the factors that convinced me to buy RAB shares, which are also now listed on Aim).

Exploiting the macro-economic trend, RAB also bridged a gap in the financing of smaller miners. Its equity was instrumental in giving banks the confidence to lend, thus creating a virtuous circle. Mining companies could invest to seize the upturn.

A booming Chinese economy has also helped, with demand for raw materials pushing up metal prices and therefore mining shares. I am wary, for as an economics student I learned how capricious trends in the Chinese economy can be. Upsets occur despite the image of strong growth.

Besides being tied to the health of the US economy (which is China's principal export market), there is a risk that continued foreign investment in China will result in overcapacity. That would hit raw material prices and thus mining shares.

Despite risks along the way, the momentum appears strong. In terms of the party for miners - commercially and in the stock market - we may only be at about 10pm.

Anglo Pacific shows how good governance and being a director of a mining company need not be a contradiction. The consistent growth chart reflects a well-run business.

A shareholder in Anglo Pacific told me to take a closer look when the price was only 14p. It was the emotional baggage typically associated with mining shares that discouraged me from buying.

The company is in the classic mould of a mining finance house, taking pro-active investment stakes. In recent years this strategy has grown pre-tax profit from a small base to 4.1m, with a yield of about 4.5 per cent at the current share price of 55.25p.

Yet the two executive directors have not been given big pay and share options. The 2002 annual report showed individual salaries of about 48,500 and bonuses of 40,000 each for 2000 and 2001 while contributions to their pensions were minimal. Each executive director had less than 1m share options, exercisable at about 21p.

Their prosperity is directly linked to the returns enjoyed by investors as they each hold over 3 per cent of the equity. I doubt the 2003 annual report will show big increases in their packages. So much for boards who say big pay and options are the only way to motivate!

The prelims showed a fall in operating profit from 5.2m to 2.6m due to the group's Australian interests mining coal on government rather than private land with lower royalties. The results should improve this year, aided by coal prices rising in the Far East. I recognise the risks but long-term the region is a dynamo.

The company holds a variety of other stakes in the Far East as well as in Canada. I think it has further upside potential, so long as one appreciates it is also geared to the fortunes of the commodities cycle.

Peter Hambro Mining, which operates mainly in gold in far eastern Russia, is another example how a combination of integrity and the ability of key personnel has delivered excellent progress. I don't like to be shown the chart because it reminds me of a golden opportunity missed.

I am learning that in the quoted resources sector there are rivals and malcontents who sow doubts. It is best to form your own judgment and not consult many others. Hambro went to a lot of effort to help me understand its operations yet I allowed myself to be swayed by scepticism.

Griffin Mining has become a favourite on Aim this year, with its shares rising from 17p to test 30p. Its prospects were bolstered in February by an RAB-backed 8.75m placing to help development of the Caijaiying zinc-gold project in China. It is estimated to have reserves worth $1.5bn (833m).

As with Anglo Pacific, it intrigues me how a small company such as Griffin is progressing nicely under an executive chairman. Corporate governance rules prescribe a split, with a chief executive and non-executive chairman.

Indeed, investors in all sizes of company have learned bitter lessons about a concentration of power. But for small companies an executive chairman is sometimes better. It puts the onus on investors to judge the boss's capability and integrity, which is no bad thing.

Griffin's chairman has publicly expressed the company's "faith and long tenure" in China. As with Peter Hambro Mining in Russia, good local relations are a key to long-term success. So far the joint venture at Caijaiying is the only foreign mining venture to be granted a base metals extraction licence under Chinese mining laws. Production is targeted to start in the second quarter of 2005.

Ocean Equities, Griffin's broker, anticipates annual pre-tax cash flow of about $25m (13.9m) at current zinc prices, once mining reaches 500,000 tons a year. At 26.75p a share, Griffin is capitalised at 43m.

I recently calculated a fair value to be about 30p a share, though I could well be conservative. I like to identify a margin of safety in a share, and in a higher risk industry/country this should be a thumping margin. But to play mining shares well, perhaps I should relax this constraint - so long as the underlying trend is firm - and recognise this sector always has an element of speculation.

Griffin seems an attractive long-term play, so long as one appreciates the potential for bumps along the way. If the Chinese boom slows, that could mean a sell-off among miners eventually, with smaller company shares vulnerable. Yet Griffin looks set to progress commercially.

The outlook for zinc prices is fair and the geological fault system at Caijaiying also has good upside potential as a gold resource.

Asia Energy, which is floating on Aim, is another group where RAB Capital's Special Situations hedge fund is investing more money. After full due diligence, the fund initially backed the company with private equity. All this is interesting for long-term prospects because venture capital money normally exits on a flotation. About 15m is being raised at 75p a share.

The group's 100 per cent-owned Phulbari project involves developing an open pit coal mine and power station in Bangladesh, and is of major importance to that country's economic development. A feasibility study is likely to take at least 18 months but management is confident and well organised locally.

Phulbari is in northwest Bangladesh, 30 metres above sea level, and not subject to seasonal flooding, unlike large areas of the country.

On a long-term view, Asia Energy is interesting. It's hard to say if there may be a better chance to buy, say in about nine months' time. Dealings start on Aim tomorrow.

cheers Gf.

Fine looking chart.




cheers GF

Canadian Coal Interests
In British Columbia the Group owns a 50% interest in the Groundhog and Trefi coal deposits as well as an interest in the Merritt and other coal bed methane projects via its 25% shareholding in Gosfield Associates Corporation.

There has been a change in the political climate in British Columbia due to the recent election of a Liberal Government pledged to re-invigorate the Provencial resource sector. It is the Group's intention to develop these resources by negotiating a carried interest with a major joint venture partner at the appropriate time.

Groundhog
The Groundhog project in central British Columbia comprises seven coal exploration licenses totalling 3,900 acres in three groups. Based upon past exploration, the British Columbia Ministry of Energy and Mines quotes the following resources of high ash semi-anthracite to anthracite rank coal:-

1. Discovery 343 million tons
2. Panorama North 108 million tons
3. Panorama South 218 million tons

The resources are very large but the area is remote and requires major investment for access.

Trefi
The Trefi project comprises seven coal exploration licenses covering 4,600 acres in northeast British Columbia in the heart of the productive and well developed Peace River coal field. Resources quoted by the British Columbia Ministry of Energy and Mines are 121.5 million tons of low to medium volatile bituminous coal. The local infrastructure is excellent.

Merritt
The Merritt project in southern British Columbia comprises:-

1250 acres of crown lands
3709 acres of provincial coal exploration licenses
Based upon estimates from the British Columbia Ministry of Energy and Mines, the project contains the following resources:-

31 billion cubic feet of Coal Bed Methane
218 million tons of bituminous grade coal
The local infrastructure is excellent with good road and rail connections as well as close proximity to the main British Columbia gas pipeline servicing the Vancouver metropolitan and U.S. export markets.

cheers GF.

I was getting interested in APF until I saw this

Head office c/o Jeffrey Gold & Co
4a Accommodation Road
London NW11 8ED

It seems that they haven't got their own office.

It appears to be just a mail drop.

There is no website for APF

There is no reply on
020 8458 5141

Given here

focus.comdirect.co.uk

A bit worrying & disappointing.

Is their main listing on an overseas exchange?
Is their main office overseas?

Perhaps their FTSE fledgling listing is not their main listing?

Everything else I've seen about the company looks pretty good.

Apple, they are an Australin company.

cheers gf. PS, this ones going to be a fantastic investment, just waiting for an outer to make us money.

Remember Caldwell Investments a month or so back, everybody thought I was bonkers, but not me. I knew there was an opportunity there, and what did we get about circa of 180% gain in price. I made a bomb.

Patience is the key and I would not place a reco on any stock unless I held it myself.

Good luck cheers GF.

Thanks GF

Surely they must have a website.

What is the name of the Australian company?

Google doesn't find me a website for Anglo Pacific.

Yep you were right about Caldwell!

Found the website

http://www.anglopacificgroup.com/

Found it on

http://www.minesite.com/companies/anglo.htm

Google now finds it as well.

A nice but small rise today. This one is well undervalued on the forward P/E.

cheers GF.

Moving up again today, slowly but surely.

cheers GF.

broker brewer &dolphin which is on Minesite

Coal prices looking good.

Gold looking good.

Looks good for APF

Yup lovely.

cheers GF.

26/05/04 10:59 Result of AGM PRNW

Final dividend of 1.3p per share

Company to make one or more market purchases of its own shares.

BUT what does the following mean?
Allotment for cash of new equity shares or from treasury.

On the move at last!

The buyers are back.

Yup nice move up today.

cheers GF.

Another shift up today. I can't see the reason for it. No direct or indirect mention in the press. Anyone got an idea?

Increasing recognition of its potential I suppose.

4.8% UP is ok by me.

UP again today.

Anyone checked out the price of Coking Coal on the World Markets?, just wonder if this as anything to do with the rises over the last few days.

cheers GF.

Good point GF

Got any good links for it?