ANGLO AMERICAN is due to resume shipments from its Amapa port in Brazil, which collapsed in March, Beadell Resources confirmed on Wednesday. Anglo Pacific has a royalty on iron ore from both companies’ mines in the region. Photograph: ISS Shipping

Treger Airdropped into Royalty House Anglo Pacific

Issue 61, October 2013

Julian Treger, lead partner at hedge fund Audley Capital, has been appointed incoming chief executive of London-listed royalty group Anglo Pacific in a stunning boardroom overhaul.

The news demonstrates Treger’s position as London’s top mining dealmaker. In 2010 he brokered the sale of Western Coal to Walter Energy for $3.3bn and has since built a dominant position in Firestone Diamonds, up 40 per cent in four weeks, instating new management and accelerating development at its Liqhobong mine in Lesotho.

Treger replaces outgoing chief executive John Theobold, whilst Audley’s Mark Potter, an M&A adviser who held shares in Anglo Pacific in early 2010, replaces outgoing chief investment officer, Chris Orchard

Their appointment grants Treger and Potter an established vehicle for striking royalty deals at an optimum point in the cycle, with debt and equity markets closed to all but the largest mining companies. “This is an opportunity to create a leading international mining royalty investment company with a focus on yield and return,” Mr. Treger said.

Anglo Pacific, which is believed to have approached Treger regarding his appointment, has been less aggressive in capitalising on the current pro-royalty environment than its Canadian peers.

Financed by equity issuance and bolstered by an undrawn credit facility, Toronto-listed Sandstorm Gold has built a portfolio of over 30 royalties and streams since listing in 2008, replicating a strategy deployed by Silver Wheaton in its formative years.

Anglo Pacific has instead focused heavily on dividend distribution, increasing shareholder payouts every year since 2002. Its largest deals have had up to decade long lead times, including royalties over London Mining’s Isua iron ore project in Greenland, Cliff’s chromite deposits in Ontario and BHP Billiton’s Railway deposit in Australia’s Pilbara.

On top of cash generative claims over mines operated by Anglo American and Rio Tinto, the asset base offers a bedrock for a wave of new royalty deals. Revenue is also due before the end of the year from the Four Mile uranium mine in South Australia.

Mr. Treger will immediately inject £2.5m ($4m) into the company for 1.3 m shares, which have risen 16 per cent on the news to £2.26.

“This is an opportunity to create a leading international mining royalty investment company with a focus on yield and return.”

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