Anglo Pacific Group PLC - INTERIM RESULTS FOR THE SIX MONTHS ENDED 30TH JUNE
2010

LONDON, Aug. 26 /CNW/ - Anglo Pacific Group PLC, the natural resources royalties company, today announces its interim results for the six months ended 30th June 2010 which demonstrate further progress in the development and diversification of its royalties portfolio. The Group has received increased royalty income from its existing assets and announces an increase in the interim dividend.

Financial Highlights

Royalties

    
    -   Total value of royalties excluding coal increased to (pnds stlg)46.5
        million (31st December 2009: (pnds stlg)27.3 million).
    -   Royalty income for the period increased to (pnds stlg)15.7 million
        (2009: (pnds stlg)11.7 million).
    -   Australian coal royalties independent valuation of (pnds stlg)158
        million (31st December 2009: (pnds stlg)149.9 million).
    

Assets

    
    -   Total assets of (pnds stlg)325 million (31st December 2009:
        (pnds stlg)312 million).
    -   Total quoted and unquoted strategic interests valued at (pnds stlg)
        87.8 million (31st December 2009: (pnds stlg)113.5 million).
    -   Cash and royalty receivables at 30th June 2010 of (pnds stlg)29.5
        million (31st December 2009: (pnds stlg)17.9 million).
    -   The Group remains debt free.
    

Earnings

    
    -   Profit before tax increased to (pnds stlg)31.7 million (2009: (pnds
        stlg)12.3 million).
    -   Earnings per share of 22.91p (2009: 8.24p).
    -   Realised profits for the period from disposal of mining interests of
        (pnds stlg)17.4 million (2009: (pnds stlg)2.1 million).
    

Dividends

    
    -   Interim dividend increased by 6.8% to 3.95p per share (2009: 3.70p)
        in line with progressive dividend policy.
    

Operational Highlights

    
    -   Further diversification of the Group's royalties portfolio, by
        commodity and geography.
    -   New royalties agreed in iron ore, gold, chromite and nickel.
    -   Initial NI 43-101 and JORC compliant resource announced for the
        Panorama Coal Project in British Columbia, Canada.
    -   Group's ordinary shares listed on the Toronto Stock Exchange (TSX)
        from 9th July 2010 under symbol APY.
    -   Market demand for mining finance remains strong.
    

Commenting on the interim results, Peter Boycott, Chairman of Anglo Pacific, said:

"I am pleased to report that, despite the fluctuations in equity markets and the economic uncertainties, the Group has continued to make good progress with its strategy of developing a leading portfolio of royalty projects. During the period we have developed and diversified our portfolio further by agreeing the acquisition of four new royalties, whilst at the same time seeing a significant increase in the royalties received from our existing assets and developing our various private Canadian coal assets.

Anglo Pacific is now quoted on both the TSX and the LSE and the profile of the Group both in the industry and amongst investors continues to grow. We look forward to expanding our shareholder base in North America in the coming months. The Board remains confident it can continue with its strategy of acquiring new royalties to generate cashflows and is therefore pleased to be able to announce a further 6.8% increase in the dividend for shareholders at the interim stage."

    
    Important notice
    ----------------
    

This report contains forward-looking statements based on assumptions and reflects Anglo Pacific's expectations, estimates and projections of future events as of the date of this report. Forward-looking statements include, without limitation, statements regarding the performance, prospects, opportunities, priorities, targets, goals, objectives, strategies, growth and outlook of Anglo Pacific. Often, but not always, forward-looking statements can be identified by the use of words such as "expects", "anticipates", "plans", "believes", "estimates", "seeks", "intends", "targets", "projects", "forecasts", or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved.

Forward-looking statements are based upon certain material factors and assumptions that were applied in drawing a conclusion or making a forecast or projection, including assumptions and analyses made by Anglo Pacific in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors that are believed to be appropriate in the circumstances. Also, forward-looking statements involve known and unknown risks, uncertainties and other factors that are beyond the Company's control and which may cause the actual results, performance or achievement to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such material factors and assumptions and risks and uncertainties include, among others, those described in the Company's annual information form dated as of 29th June 2010 ("AIF", available on Anglo Pacific's website and at www.sedar.com), which are incorporated by reference into this report and qualify any and all forward-looking statements made in this report.

Although Anglo Pacific has attempted to identify factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. There can be no assurance that actual results will be consistent with these forward-looking statements. Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements herein relate only to events or information as of the date on which the statements are made and, except as specifically required by law, Anglo Pacific undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, estimates or opinions, future events or results or otherwise.

The mineral resource estimates related to the Panorama Coal Project included in this report were reviewed and approved by Mr. Robert J. Morris (Principal Geologist) and Mr. Robert F. Engler (Principal) of Moose Mountain Technical Services (each a Qualified Person under NI 43-101 and independent of the Company) and documented in the technical report entitled "Resource Estimate for the Discovery and Panorama Coal Properties" dated 28th March, 2010 as prepared by Mr. Robert J. Morris (Principal Geologist) and Mr. Robert F. Engler (Principal) of MMTS. A copy of this report is available under the Company's profile at www.sedar.com. Each of the Discovery Property and the Panorama Property are early-stage exploration properties and seasonal weather conditions prevented Mr. Morris from completing a personal inspection of the properties. A site visit has recently been completed, and an updated technical report will be filed.

    
                           Anglo Pacific Group PLC

                             CHAIRMAN'S STATEMENT

    -------------------------------------------------------------------------
    

Review and Results for six months ended 30th June 2010

Despite sharp equity market fluctuations and economic uncertainties the Group has made further progress during the first six months of 2010. The Group has agreed to acquire several new royalties and the value of the Group's total assets has increased. Furthermore, the Group obtained a secondary listing for its ordinary shares on the TSX and received record coking coal royalties during the period.

The Group's royalty revenues were (pnds stlg)15.7 million for the first half of 2010 compared to (pnds stlg)11.7 million during the same period last year. Prices of both thermal and metallurgical coal from Australia have continued to benefit from increasing demand from India, China and the Far East with contracted prices in excess of US$100 and US$220 per ton respectively being achieved. The Group's Australian coal royalty interests were independently valued at 30th June 2010 at (pnds stlg)158 million compared to (pnds stlg)149.9 million at 31st December 2009 and (pnds stlg)113 million at 30th June 2009.

The Group realised capital gains of (pnds stlg)17.4 million during the period from the sale of mining interests, compared to (pnds stlg)2.1 million during the corresponding period in 2009. Including royalty revenues, the Group achieved earnings of 22.91p per share for the half year compared to 8.24p for the first six months of 2009.

During the half year the Group agreed the acquisition of four new royalties. At the period end the total of the Group's royalty entitlements shown in the financial statements at valuation, excluding the value of the Group's coal royalty, was (pnds stlg)28.2 million compared to (pnds stlg)22 million at 31st December 2009. In addition the total of the Group's royalty entitlements treated as intangibles and carried in the financial statements at cost was (pnds stlg)18.3 million compared to (pnds stlg)5.3 million at 31st December 2009. These bring the total value of non-coal royalties to (pnds stlg)46.5 million, compared to (pnds stlg)27.3 million at 31st December 2009.

The value of the Group's private mining interests and quoted stakes in mining companies reduced to (pnds stlg)87.8 million at 30th June 2010 compared to (pnds stlg)113.5 million at 31st December 2009. This was mainly as a result of the disposal of a number of mining interests.

At 30th June 2010 the Group had cash and royalty receivables of (pnds stlg)29.5 million with no borrowings.

These earnings and balance sheet valuations show steady progress during a period of continued uncertainty for the world economy. The Group remains committed to a conservative approach to the management of the assets under its control.

The Board is increasing the interim dividend for the year ending 31st December 2010 by 6.8% to 3.95p per share.

Strategy and Progress

The Group's strategy remains focused on securing new royalties by acquisition and through investment in its mining interests in order to generate strong cashflows and continue to pay dividends to its shareholders. The Group remains committed to a progressive dividend policy and to further expanding its other mining interests and royalty flows in pursuit of this objective.

Royalties

The Group has continued to expand its portfolio by agreeing to acquire four new royalties during the half year. These iron ore, gold, chromite and nickel royalties further broaden and diversify the Group's royalty portfolio.

    
    -   Iron Ore (Australia): in May 2010 the Group announced that it had
        agreed to purchase the DFD Rhodes Group iron ore royalty, covering
        three exploration licences in the central Pilbara region of Western
        Australia (the "Pilbara Deposits"), for a sum of A$23 million in
        cash. The tenements, covering 263 square kilometres, are owned by a
        wholly owned subsidiary of BHP Billiton ("BHPB") and are subject to a
        1.5% royalty on total gross revenue. The royalty tenements host a
        number of known iron occurrences, the most significant being the
        Railway deposit. The tenements are supported by extensive rail
        infrastructure including the rail lines from Rio Tinto's West Angelas
        and Yandicoogina mines and BHPB's rail line serving its current
        operations at Mining Area C, which lies immediately to the east of
        the Railway deposit. The transaction completed on 30th June 2010. The
        Group is pleased to have acquired such a high quality royalty and
        anticipates that these iron ore deposits will be mined by BHPB in
        years to come as part of its planned expansion of iron ore output in
        the Pilbara.

    -   Gold (Tanzania): in May 2010 the Group announced that it had agreed
        with Shanta Gold PLC, subject to contract and due diligence, a
        royalty financing of US$5 million. Shanta Gold has agreed to pay the
        Group a 3% Net Smelter Royalty ("NSR") on all of the mined product
        from its Chunya Gold Project in south west Tanzania as well as a
        further 2% NSR on its Singida Gold Project in central northern
        Tanzania.

    -   Chromite (Albania): in May 2010 the Group announced that, subject to
        contract and due diligence, it had agreed with Empire Mining
        Corporation to acquire for C$3.1 million a 3% gross royalty (GR) on
        the Bulquiza-Batra chromite project in Albania. These funds will
        enable Empire Mining to advance project exploration and development
        with the aim of moving towards production as early as 2011.

    -   Nickel (Brazil): in May 2010 the Group agreed, subject to contract
        and due diligence, to pay to Horizonte Minerals PLC the sum of US
        $500,000 in exchange for an option to acquire for US$12.5 million a
        1.5% NSR on all revenue from the Araguaia nickel project in Brazil.
        This nickel laterite project was acquired from Teck Resources Limited
        of Canada in exchange for a 50% equity stake in Horizonte Minerals.
    

Assets

At 30th June 2010 the Group's cash, receivables and strategic investments were (pnds stlg)118.3 million (31st December 2009: (pnds stlg)132.7 million). Together with the Group's coal and other royalties worth (pnds stlg)204.5 million and fixed assets and capitalised exploration costs of (pnds stlg)2.7 million, the Group's total assets at 30th June 2010 were (pnds stlg)325 million (31st December 2009: (pnds stlg)312 million).

The Group remains debt free and its liquid resources are held in a spread of currencies and banks. The Group's mining interests, royalty revenues and cash holdings are mainly denominated in Australian and Canadian dollars.

Private Coal Projects

On 16th February 2010 the Group released an initial resource statement on the wholly owned Panorama Coal Project in the Groundhog Coalfield in Northwest British Columbia. This showed a NI 43-101 and JORC compliant Indicated Resource of 13.7 million tonnes and an Inferred Resource of 24.1 million tonnes of semi-anthracite to anthracite coal.

Work continues on the scoping study at the Group's Trefi Coal Project in British Columbia.

Quoted Equity Interests

The Group's quoted equity interests disclosed on the LSE, ASX and TSX, where initial equity stake disclosure levels are 3%, 5% and 10% respectively, amounted to (pnds stlg)71 million in eighteen different holdings. The balance of quoted holdings of (pnds stlg)7 million is made up of a further sixteen incubator investments. The split of the Group's strategic interests by commodity can be seen on the Group's website at www.anglopacificgroup.com where links to all the equity disclosures can be accessed.

Dividends

On 7th July 2010 a final dividend of 4.65p per share for the year ended 31st December 2009 was paid. Shareholders representing 24% of the issued share capital elected to take scrip instead of cash. The interim dividend announced today of 3.95p per share for the year ending 31st December 2010 will be paid on 12th January 2011. A scrip dividend alternative will again be available to eligible shareholders subject to market conditions.

Overseas Listings

On 28th May 2010 at Anglo Pacific's request its shares were de-listed from the Australian Stock Exchange due to a lack of liquidity, negligible volumes and less than two percent of the Group's share capital being held on the Australian share register.

Reflecting the continued development of the Group and its royalty asset base, the listing of the Group's ordinary shares on the TSX was completed on 9th July 2010 under the symbol APY. As a substantial number of the Group's private and quoted mining interests are in Canada, it is the Group's medium term strategy to broaden the shareholder base to embrace North American investors. The Canadian listing also increases the profile of the Group more broadly within the industry and in a market where royalty financing is well established and has a higher profile with investors.

Outlook

Conditions in the equity markets for mining development companies improved in the earlier part of the year. More recently, however, with the decline in commodity prices and fears of a double dip recession, the raising of mining finance from conventional lenders or through equity issues has once again become more challenging.

Within this environment Anglo Pacific, with its cash resources and strong royalty revenues, remains well positioned to work with companies to meet their financing requirements and thereby increase its own royalty portfolio. This remains the Group's dominant strategic focus. The Group is continuing to evaluate several new royalty opportunities.

    
    P. M. Boycott
    Chairman
    26th August 2010
    

DISCLOSURE UNDER DISCLOSURE AND TRANSPARENCY RULES

In accordance with Disclosure and Transparency Rules (DTRs), Periodic Financial Reporting DTR 4.2.7R, the Group confirms that the principal risks and uncertainties that could affect the Group's performance have not changed. These are: a prolonged, world-wide economic recession; sustained low commodity prices; a fall in precious metal prices; further deterioration in the banking system; and currency volatility. For more information regarding these risks and uncertainties please refer to page 13 of the 2009 Annual Report.

No related party transactions occurred in the first six months of the year that would require disclosure in accordance with DTR 4.2.8R.

We confirm to the best of our knowledge:

    
    i    The condensed set of financial statements has been prepared in
         accordance with IAS 34 'Interim Financial Reporting' and give a true
         and fair view of assets and liabilities, financial position and
         profit and loss;
    ii   the interim management report includes a fair review of the
         information required by DTR 4.2.7R (indication of important events
         during the first six months and description of principal risks and
         uncertainties for the remaining six months of the year); and
    iii  the interim management report includes a fair review of the
         information required by DTR 4.2.8R (disclosure of related parties
         transactions and changes therein).

    By order of the Board

    M. J. Tack
    Finance Director
    26th August 2010


                           Anglo Pacific Group PLC

                        CONSOLIDATED INCOME STATEMENT
                   FOR THE SIX MONTHS ENDED 30th JUNE 2010

    -------------------------------------------------------------------------

                                     Six months    Six months
                                        ended         ended      Year ended
                                      30th June     30th June   31st December
                                        2010          2009          2009
                                     (pnds stlg)   (pnds stlg)   (pnds stlg)
                                        '000          '000          '000


    Royalty income                        15,679        11,713        20,334
    Other operating income                    18             2            13
    Finance income                           570           313           796
                                    ------------- ------------- -------------
                                          16,267        12,028        21,143
    Profit on sale of mining and
     exploration interests                17,372         2,113         6,367
                                    ------------- ------------- -------------
    Total income                          33,639        14,141        27,510

    Share of profit of associates            262             -           515
    Net operating expenses                (2,189)       (1,883)       (2,142)
                                    ------------- ------------- -------------
    Profit before tax                     31,712        12,258        25,883

    Tax                                   (6,981)       (3,465)       (5,252)
                                    ------------- ------------- -------------
    Profit attributable to
     equity holders                       24,731         8,793        20,631
                                    ------------- ------------- -------------
                                    ------------- ------------- -------------

    Basic earnings per share              22.91p         8.24p        19.11p
                                    ------------- ------------- -------------

    Fully diluted earnings
     per share                            22.91p         8.24p        19.11p
                                    ------------- ------------- -------------



                           Anglo Pacific Group PLC

               CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                   FOR THE SIX MONTHS ENDED 30th JUNE 2010

    -------------------------------------------------------------------------

                                     Six months    Six months
                                        ended         ended      Year ended
                                      30th June     30th June   31st December
                                        2010          2009          2009
                                     (pnds stlg)   (pnds stlg)   (pnds stlg)
                                        '000          '000          '000


    Profit for the financial period       24,731         8,793        20,631
    Other comprehensive income
    Net gain/(loss) on revaluation
     to coal royalties                     6,362        18,567        42,916
    Net (loss)/gain on revaluation
     of available for sale
     investments                          (2,946)       31,833        63,737
    Net exchange gain/(loss) on
     translation of foreign
     operations                            1,651         1,636        15,585
    Share of other comprehensive
     income of associates                    103             -           (65)
    Deferred tax                          (1,635)       (8,879)      (21,770)
                                    ------------- ------------- -------------
    Net income/(expense) recognised
     directly in equity                   28,266        51,950       121,034
                                    ------------- ------------- -------------

    Transferred to income statement
     disposal of available for
     sale investments                    (16,238)        1,080           322
                                    ------------- ------------- -------------
    Total transferred (to)/from
     equity                              (16,238)        1,080           322
                                    ------------- ------------- -------------

                                    ------------- ------------- -------------
    Total comprehensive income
     for the financial period             12,028        53,030       121,356
                                    ------------- ------------- -------------
                                    ------------- ------------- -------------



                           Anglo Pacific Group PLC

                         CONSOLIDATED BALANCE SHEET
                            AS AT 30th JUNE 2010

    -------------------------------------------------------------------------

                                      30th June     30th June   31st December
                                        2010          2009          2009
                                     (pnds stlg)   (pnds stlg)   (pnds stlg)
                                        '000          '000          '000
                                    ------------- ------------- -------------

    Non-current assets
    Property plant and equipment           2,077           827         1,742
    Coal royalties                       157,977       113,023       149,896
    Royalty instruments                   28,159        11,319        21,979
    Intangibles                           18,921         3,030         6,095
    Mining and exploration interests      84,494        81,963       109,695
    Investments in associates              3,324             -         3,771
                                    ------------- ------------- -------------
                                         294,952       210,162       293,178

    Current assets
    Trade and other receivables           11,679         6,214         5,082
    Cash at bank                          18,841        14,364        14,195
                                    ------------- ------------- -------------
                                          30,520        20,578        19,277

                                    ------------- ------------- -------------
    Total assets                         325,472       230,740       312,455
                                    ------------- ------------- -------------
                                    ------------- ------------- -------------

    Non-current liabilities
    Deferred tax                          51,594        35,925        47,883
                                    ------------- ------------- -------------
                                          51,594        35,925        47,883

    Current liabilities
    Taxation                               4,323         1,970         4,146
    Trade and other payables                 429           309           390
    Dividends payable                      3,788         1,947             -
                                    ------------- ------------- -------------
                                           8,540         4,226         4,536

                                    ------------- ------------- -------------
    Total liabilities                     60,134        40,151        52,419
                                    ------------- ------------- -------------

    Capital and reserves
     attributable to shareholders
    Share capital                          2,171         2,123         2,149
    Share premium                         23,262        18,604        20,718
    Coal royalty revaluation reserve      92,929        71,549        88,582
    Investment revaluation reserve        18,566         7,642        36,850
    Share based payment reserve                2            78            78
    Foreign currency translation
     reserve                              20,038         8,557        18,804
    Special reserve                          632           632           632
    Investment in own shares              (1,295)            -             -
    Retained earnings                    109,033        81,404        92,223
                                    ------------- ------------- -------------
    Total equity                         265,338       190,589       260,036
                                    ------------- ------------- -------------

                                    ------------- ------------- -------------
    Total equity and liabilities         325,472       230,740       312,455
                                    ------------- ------------- -------------
                                    ------------- ------------- -------------



                           Anglo Pacific Group PLC

                 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
                   FOR THE SIX MONTHS ENDED 30th JUNE 2009

    -------------------------------------------------------------------------

                                                Coal                  Share
                                              royalty   Investment    based
                          Share     Share   revaluation revaluation  payment
                         capital   premium    reserve     reserve    reserve
                          (pnds     (pnds      (pnds       (pnds      (pnds
                          stlg)     stlg)      stlg)       stlg)      stlg)
                          '000      '000       '000        '000       '000
    -------------------------------------------------------------------------

    Balance at
     1st January 2009      2,123     18,604     58,430    (22,149)        78
    Profit for the
     period                    -          -          -          -          -
    Other comprehensive
     income:
    Coal royalties:
      Royalties valuation
       movement taken
       to equity               -          -     18,567          -          -
      Deferred tax on
       valuation               -          -     (5,448)         -          -
    Available-for-sale
     investments:
      Valuation movement
       taken to equity         -          -          -     31,833          -
      Deferred tax on
       valuation               -          -          -     (3,122)         -
      Transferred to
       income statement
       on disposal             -          -          -      1,080          -
      Reclassification
       as investment in
       associate               -          -          -          -          -
    Share of comprehensive
     income of associates      -          -          -          -          -
    Foreign currency
     translation               -          -          -          -          -
                        -----------------------------------------------------
    Total comprehensive
     income                    -          -     13,119     29,791          -
                        -----------------------------------------------------
    Dividends paid             -          -          -          -          -
    Scrip dividend             -          -          -          -          -
    Issue of share
     capital                   -          -          -          -          -
    Issue of share
     capital under
     share-based payment       -          -          -          -          -
                        -----------------------------------------------------
    Transactions with
     owners                    -          -          -          -          -
                        -----------------------------------------------------
    Balance at
     30th June 2009        2,123     18,604     71,549      7,642         78
                        -----------------------------------------------------


                         Foreign
                        currency             Investment
                       translation  Special    In Own    Retained     Total
                         reserve    reserve    Shares    earnings    equity
                          (pnds      (pnds      (pnds      (pnds      (pnds
                          stlg)      stlg)      stlg)      stlg)      stlg)
                          '000       '000       '000       '000       '000
    -------------------------------------------------------------------------

    Balance at
     1st January 2009      7,230        632          -     80,894    145,842
    Profit for the
     period                    -          -          -      8,793      8,793
    Other comprehensive
     income:
    Coal royalties:
      Royalties valuation
       movement taken
       to equity           1,108          -          -          -     19,675
      Deferred tax on
       valuation            (326)         -          -          -     (5,774)
    Available-for-sale
     investments:
      Valuation movement
       taken to equity        22          -          -          -     31,855
      Deferred tax on
       valuation              17          -          -          -     (3,105)
      Transferred to
       income statement
       on disposal             -          -          -          -      1,080
      Reclassification
       as investment in
       associate               -          -          -          -          -
    Share of comprehensive
     income of associates      -          -          -          -          -
    Foreign currency
     translation             506          -          -          -        506
                        -----------------------------------------------------
    Total comprehensive
     income                1,327          -          -      8,793     53,030
                        -----------------------------------------------------
    Dividends paid             -          -          -     (8,283)    (8,283)
    Scrip dividend             -          -          -          -          -
    Issue of share
     capital                   -          -          -          -          -
    Issue of share
     capital under
     share-based payment       -          -          -          -          -
                        -----------------------------------------------------
    Transactions with
     owners                    -          -          -     (8,283)    (8,283)
                        -----------------------------------------------------
    Balance at
     30th June 2009        8,557        632          -     81,404    190,589
                        -----------------------------------------------------



                           Anglo Pacific Group PLC

                 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
                 FOR THE SIX MONTHS ENDED 31st DECEMBER 2009

    -------------------------------------------------------------------------

                                                Coal                  Share
                                              royalty   Investment    based
                          Share     Share   revaluation revaluation  payment
                         capital   premium    reserve     reserve    reserve
                          (pnds     (pnds      (pnds       (pnds      (pnds
                          stlg)     stlg)      stlg)       stlg)      stlg)
                          '000      '000       '000        '000       '000
    -------------------------------------------------------------------------

    Balance at
     30th June 2009        2,123     18,604     71,549      7,642         78
    Profit for the
     period                    -          -          -          -          -
    Other comprehensive
     income:
    Coal royalties:
      Royalties valuation
       movement taken
       to equity               -          -     24,349          -          -
      Deferred tax on
       valuation               -          -     (7,316)         -          -
    Available-for-sale
     investments:
      Valuation movement
       taken to equity         -          -          -     31,958          -
      Deferred tax on
       valuation               -          -          -     (1,938)         -
      Transferred to
       income statement
       on disposal             -          -          -       (758)         -
      Reclassification
       as investment
       in associate            -          -          -        (54)         -
    Share of comprehensive
     income of associates      -          -          -          -          -
    Foreign currency
     translation               -          -          -          -          -
                        -----------------------------------------------------
    Total comprehensive
     income                    -          -     17,033     29,208          -
                        -----------------------------------------------------
    Dividends paid             -          -          -          -          -
    Scrip dividend            24      1,966          -          -          -
    Issue of share
     capital                   -          -          -          -          -
    Issue of share
     capital under
     share-based payment       2        148          -          -          -
                        -----------------------------------------------------
    Transactions with
     owners                   26      2,114          -          -          -
                        -----------------------------------------------------
    Balance at
     31st December 2009    2,149     20,718     88,582     36,850         78
                        -----------------------------------------------------


                         Foreign
                        currency             Investment
                       translation  Special    in Own    Retained     Total
                         reserve    reserve    Shares    earnings    equity
                          (pnds      (pnds      (pnds      (pnds      (pnds
                          stlg)      stlg)      stlg)      stlg)      stlg)
                          '000       '000       '000       '000       '000
    -------------------------------------------------------------------------

    Balance at
     30th June 2009        8,557        632          -     81,404    190,589
    Profit for the
     period                    -          -          -     11,838     11,838
    Other comprehensive
     income:
    Coal royalties:
      Royalties valuation
       movement taken
       to equity          12,525          -          -          -     36,874
      Deferred tax on
       valuation          (3,681)         -          -          -    (10,997)
    Available-for-sale
     investments:
      Valuation movement
       taken to equity       (14)         -          -          -     31,944
      Deferred tax on
       valuation              44          -          -          -     (1,894)
      Transferred to
       income statement
       on disposal             -          -          -          -       (758)
      Reclassification
       as investment
       in associate            -          -          -          -        (54)
    Share of comprehensive
     income of associates    (65)         -          -          -        (65)
    Foreign currency
     translation           1,438          -          -          -      1,438
                        -----------------------------------------------------
    Total comprehensive
     income               10,247          -          -     11,838     68,326
                        -----------------------------------------------------
    Dividends paid             -          -          -     (1,019)    (1,019)
    Scrip dividend             -          -          -          -      1,990
    Issue of share
     capital                   -          -          -          -          -
    Issue of share
     capital under
     share-based payment       -          -          -          -        150
                        -----------------------------------------------------
    Transactions with
     owners                    -          -          -     (1,019)     1,121
                        -----------------------------------------------------
    Balance at
     31st December 2009   18,804        632          -     92,223    260,036
                        -----------------------------------------------------



                           Anglo Pacific Group PLC

                 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
                   FOR THE SIX MONTHS ENDED 30th JUNE 2010

    -------------------------------------------------------------------------

                                                Coal                  Share
                                              royalty   Investment    based
                          Share     Share   revaluation revaluation  payment
                         capital   premium    reserve     reserve    reserve
                          (pnds     (pnds      (pnds       (pnds      (pnds
                          stlg)     stlg)      stlg)       stlg)      stlg)
                          '000      '000       '000        '000       '000
    -------------------------------------------------------------------------

    Balance at
     1st January 2010      2,149     20,718     88,582     36,850         78
    Profit for the
     period                    -          -          -          -          -
    Other comprehensive
     income:
    Coal royalties:
      Royalties valuation
       movement taken
       to equity               -          -      6,362          -          -
      Deferred tax on
       valuation               -          -     (2,015)         -          -
    Available-for-sale
     investments:
      Valuation movement
       taken to equity         -          -          -     (2,946)         -
      Deferred tax on
       valuation               -          -          -        900          -
      Transferred to
       income statement
       on disposal             -          -          -    (16,238)         -
      Reclassification
       as investment
       in associate            -          -          -          -          -
    Share of comprehensive
     income of associates      -          -          -          -          -
    Foreign currency
     translation               -          -          -          -          -
                        -----------------------------------------------------
    Total comprehensive
     income                    -          -      4,347    (18,284)         -
                        -----------------------------------------------------
    Dividends paid             -          -          -          -          -
    Scrip dividend            11      1,199          -          -          -
    Issue of share
     capital                   -          -          -          -          -
    Issue of share
     capital under
     share-based payment      11      1,345          -          -        (76)
                        -----------------------------------------------------
    Transactions with
     owners                   22      2,544          -          -        (76)
                        -----------------------------------------------------
    Balance at
     30th June 2010        2,171     23,262     92,929     18,566          2
                        -----------------------------------------------------


                         Foreign
                        currency             Investment
                       translation  Special    in Own    Retained     Total
                         reserve    reserve    Shares    earnings    equity
                          (pnds      (pnds      (pnds      (pnds      (pnds
                          stlg)      stlg)      stlg)      stlg)      stlg)
                          '000       '000       '000       '000       '000
    -------------------------------------------------------------------------

    Balance at
     1st January 2010     18,804        632          -     92,223    260,036
    Profit for the
     period                    -          -          -     24,731     24,731
    Other comprehensive
     income:
    Coal royalties:
      Royalties valuation
       movement taken
       to equity           1,719          -          -          -      8,081
      Deferred tax on
       valuation            (507)         -          -          -     (2,522)
    Available-for-sale
     investments:
      Valuation movement
       taken to equity       (53)         -          -          -     (2,999)
      Deferred tax on
       valuation             (13)         -          -          -        887
      Transferred to
       income statement
       on disposal             -          -          -          -    (16,238)
      Reclassification
       as investment
       in associate            -          -          -          -          -
    Share of comprehensive
     income of associates    103          -          -          -        103
    Foreign currency
     translation             (15)         -          -          -        (15)
                        -----------------------------------------------------
    Total comprehensive
     income                1,234          -          -     24,731     12,028
                        -----------------------------------------------------
    Dividends paid             -          -          -     (7,934)    (7,934)
    Scrip dividend             -          -          -          -      1,210
    Issue of share
     capital                   -          -          -          -          -
    Issue of share
     capital under
     share-based payment       -          -     (1,295)        13         (2)
                        -----------------------------------------------------
    Transactions with
     owners                    -          -     (1,295)    (7,921)    (6,726)
                        -----------------------------------------------------
    Balance at
     30th June 2010       20,038        632     (1,295)   109,033    265,338
                        -----------------------------------------------------



                           Anglo Pacific Group PLC

                    CONSOLIDATED STATEMENT OF CASH FLOWS
                   FOR THE SIX MONTHS ENDED 30th JUNE 2010

    -------------------------------------------------------------------------

                                     Six months    Six months
                                        ended         ended      Year ended
                                      30th June     30th June   31st December
                                        2010          2009          2009
                                     (pnds stlg)   (pnds stlg)   (pnds stlg)
                                        '000          '000          '000

    Cashflows from operating
     activities
    Profit before taxation                31,712        12,258        25,883
    Adjustments for:
    Interest received                       (570)         (313)         (796)
    Unrealised foreign
     currency loss                            (4)          509         1,562
    Depreciation of property,
     plant and equipment                       9             2            12
    (Gain) on disposal of mining
     and exploration interests           (17,372)       (2,113)       (6,367)
    Loss/(gain) on revaluation of
     assets held as fair value
     through profit or loss                  811          (221)         (130)
    Loss on write down of assets               -             -           410
    Share of associates (profit)            (262)            -          (515)
    Share based payments                      12             -           150
                                    ------------- ------------- -------------
                                          14,336        10,122        20,209

    (Increase)/Decrease in trade
     and other receivables                (6,597)        5,361         6,493
    Increase/(Decrease) in trade
     and other payables                       29          (540)         (459)
                                    ------------- ------------- -------------
    Cash generated from operations         7,768        14,943        26,243
    Income taxes paid                     (4,729)       (4,182)       (4,727)
                                    ------------- ------------- -------------
    Net cash from operating
     activities                            3,039        10,761        21,516
                                    ------------- ------------- -------------

    Cash flows from investing
     activities
    Proceeds on disposal of mining
     and exploration interests            29,292         7,856        25,391
    Purchase of mining and
     exploration interests               (13,028)      (12,337)      (29,195)
    Purchases of royalty interests       (13,001)       (3,030)      (12,245)
    Acquisition of associates               (109)            -        (1,331)
    Return of capital from
     associates                              949             -             -
    Purchases of property, plant
     and equipment                          (335)            -           (80)
    Exploration and evaluation
     expenditure                             176             -          (513)
    Interest received                        570           313           796
                                    ------------- ------------- -------------
    Net cash generated/(used)
     in investing activities               4,514        (7,198)      (17,177)
                                    ------------- ------------- -------------

    Cash flows from financing
     activities
    Proceeds from issue of
     share capital                            30             -             -
    Dividends paid                        (2,937)       (6,335)       (7,280)
                                    ------------- ------------- -------------
    Net cash used in financing
     activities                           (2,907)       (6,335)       (7,280)
                                    ------------- ------------- -------------

    Net increase/(decrease) in
     cash and cash equivalents             4,646        (2,772)       (2,941)

    Cash and cash equivalents
     at beginning of period               14,195        17,136        17,136
                                    ------------- ------------- -------------

    Cash and cash equivalents
     at end of period                     18,841        14,364        14,195
                                    ------------- ------------- -------------
                                    ------------- ------------- -------------



                           Anglo Pacific Group PLC

                            NOTES TO THE ACCOUNTS

    -------------------------------------------------------------------------

    1.  Summary of significant accounting policies

    1.1 Basis of preparation

    These interim, condensed consolidated financial statements of Anglo
    Pacific Group PLC are for the six months ended 30th June 2010. They have
    been prepared in accordance with IAS 34 'Interim Financial Reporting'.
    They do not include all of the information required for full annual
    financial statements, and should be read in conjunction with the
    consolidated financial statements of the Group for the year ended
    31st December 2009.

    These condensed consolidated interim financial statements have been
    prepared in accordance with the accounting policies adopted in the last
    annual financial statements for the year to 31st December 2009.

    1.1.1 Changes in accounting policies and disclosures

    (a) New and amended standards adopted by the Group

    The Group has adopted the following new and amended IFRSs as of
    1st January 2010:

        -   IFRS 2 (amendments) 'Group Cash-settled Share-based Payment
            Transactions' - effective 1st January 2010. As the parent entity
            is the only entity within the Group making share-based payments,
            the adoption of this amendment has no material effect on the
            Group's financial performance or position for the period ended
            30 June 2010.

    (b) Changes in the Group's accounting policies

    The Group has adopted the following changes to its accounting policies as
    of 1st January 2010:

        -   Share-based payments: Following the approval at the 2010 Annual
            General Meeting, the Company established the Anglo Pacific Group
            plc Employee Benefit Trust through which the Company's Joint
            Share Ownership Plan (JSOP) is operated. The full terms of the
            JSOP are consistent with those outlined in the Notice of Meeting.

            Awards under the JSOP meet the definition of cash-settled
            share-based payments under IFRS 2 'Share-based Payments'. The
            Group measures the awards under the JSOP and the corresponding
            liability incurred at the fair value of the liability. Until the
            liability is settled, the Group is required to remeasure the fair
            value of the liability at the end of each reporting period and at
            the date of settlement, with any changes in value recognised in
            the income statement for the period.

            Fair value is measured by use of the Monte Carlo model. The
            expected life used in the model has been set at four years to
            reflect the three year vesting period and the one year exercise
            period in accordance with the JSOP agreements.

    This condensed consolidated half-year financial information does not
    comprise statutory accounts within the meaning of Section 434 of the
    Companies Act 2006. Statutory accounts for the year ended 31st December
    2009 were approved on 10th March 2010. These accounts which contained an
    unqualified audit report under Section 495 of the Companies Act 2006 and
    which did not make any statements under Section 498 of the Companies Act
    2006, have been delivered to the Registrar of Companies in accordance
    with Section 441 of the Companies Act 2006. The interim review report is
    set out on page 20.

    2.  Non-current assets

    (a) Coal Royalty Investments

    The Group's coal royalty investments comprise the Kestrel and Crinum coal
    royalties in Queensland, Australia. The Group commissioned a valuation of
    the coal royalties as at 30th June 2010, based on a net present value of
    the pre-tax cashflow discounted at a rate of 7%, which produced a
    valuation of A$281.0 million ((pnds stlg)158 million). At present the net
    royalty income is taxed in Australia at a rate of 30%. Were the coal
    royalties to be realised at the revalued amount there are (pnds stlg)2.2
    million (A$3.9 million) of capital losses potentially available to offset
    against taxable gains. These losses have been included in the deferred
    tax computation.

    (b) Royalty Instruments

    Royalty instruments represent the Group's interests in four mineral
    properties which, through the issue of convertible debentures, the Group
    has acquired net smelter royalties. These are the Engenho property in
    Brazil, the El Valle property in Spain, the Indo Mines property in
    Indonesia and the Midway-Malartic and McKenzie Break properties in
    Canada. In the Group's latest annual financial statements for the year
    ended 31st December 2009, these interests were described as "Royalty
    Instruments". No change has been made to the accounting treatment of
    these interests.

    (c) Intangibles

    Intangible royalty interests represent the net smelter royalties acquired
    on the Four Mile Project in South Australia, the Salamanca Uranium
    Project in Spain and the Pilbara Deposit in Western Australia. These
    total (pnds stlg)18.3 million (30th June 2009: (pnds stlg)3.0 million).

    Acquisition costs of royalty interests on feasibility stage mineral
    properties are not amortised. At such time as the associated mineral
    interests are placed into production, the cost basis is amortised over
    the expected life of mine. Amortisation rates are adjusted on a
    prospective basis for all changes to estimates of the life of mine.

    Also included within intangibles are the deferred exploration costs of
    (pnds stlg)594,000 (30th June 2009: (pnds stlg)nil) associated with the
    Group's Panorama and Trefi Projects in British Columbia, Canada.

    (d) Mining and Exploration Interests

    The investments in securities included above represent investments in
    listed and unlisted equity securities which are acquired as part of the
    Group strategy to acquire new royalties. Gains may be realised where it
    is deemed appropriate by the Investment Committee. The fair values of
    these securities are based on quoted market prices for listed securities
    and cost for unlisted securities based on the variability of cashflows
    being so significant that an alternative valuation technique would not
    provide a useful value. The fair values are reviewed for impairment at
    least annually. In the statement of changes in equity these interests are
    classified as "available-for-sale investments". During the period to 30th
    June 2010 a number of opportunities arose which allowed the Group to
    expand its mining interests, particularly in listed securities. For a
    full explanation of the Group's accounting policies in relation to the
    Mining and Exploration interests please see the 2009 Annual Report.

    The market value of the quoted Mining and Exploration Interests at 30th
    June 2010 was (pnds stlg)74,414,000 (30th June 2009: (pnds stlg)
    69,636,000). The directors' valuation of the unquoted Mining and
    Exploration Interests was (pnds stlg)10,080,000 (30th June 2009:
    (pnds stlg)12,327,000).

    3.  Earnings per ordinary share

    The earnings per ordinary share is calculated on the Company's profit
    after tax of (pnds stlg)24,731,000 and 107,969,443 shares. Fully diluted
    earnings per shares is calculated on a profit after tax of (pnds stlg)
    24,731,000 and 107,969,443 shares.

    Earnings per ordinary share excludes the issue of shares under the
    Company's Joint Share Ownership Plan, as the Employee Benefit Trust has
    waived its right to receive dividends on the 508,050 ordinary 2p shares
    it holds as at 30th June 2010.

    4.  Segment information

                                    Six months ended 30th June 2010

                                         Mining
                            Royalty     Interests   Unallocated     Total
                          (pnds stlg)  (pnds stlg)  (pnds stlg)  (pnds stlg)
                             '000         '000         '000         '000


    Income                     15,679            -           18       15,697
                          ------------ ------------ ------------ ------------

    Profit on sale of
     mining and
     exploration interests          -       17,372            -       17,372
    Interest received               -            -          570          570
    Depreciation                    -            -           (9)          (9)
    Tax                             -            -       (6,981)      (6,981)
    Share of profits of
     associates                     -          262            -          262
                          ------------ ------------ ------------ ------------
    Segment Result             15,679       17,634       (8,582)      24,731
                          ------------ ------------ ------------ ------------

    Segment Assets            216,631       87,818       21,023      325,472
    Segment Liabilities       (51,581)         (13)      (8,540)     (60,134)
                          ------------ ------------ ------------ ------------
    Net Segment Assets        165,050       87,805       12,483      265,338
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------

    Capital Expenditure             -            -          335            -
    Exploration and
     evaluation expenditure         -            -            -            -



                                    Six months ended 30th June 2009

                                         Mining
                            Royalty     Interests   Unallocated     Total
                          (pnds stlg)  (pnds stlg)  (pnds stlg)  (pnds stlg)
                             '000         '000         '000         '000

    Income                     11,713            -            2       11,715
                          ------------ ------------ ------------ ------------

    Profit on sale of
     mining and
     exploration interests          -        2,113            -        2,113
    Interest received               -            -          313          313
    Depreciation                    -            -           (2)          (2)
    Tax                             -            -       (3,465)      (3,465)
    Share of profits of
     associates                     -            -            -            -
                          ------------ ------------ ------------ ------------
    Segment Result             11,713        2,113       (5,033)       8,793
                          ------------ ------------ ------------ ------------

    Segment Assets            127,372       81,963       21,405      230,740
    Segment Liabilities       (34,745)      (1,180)      (4,226)     (40,151)
                          ------------ ------------ ------------ ------------
    Net Segment Assets         92,627       80,783       17,179      190,589
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------

    Capital Expenditure             -            -            -            -
    Exploration and
     evaluation expenditure         -            -            -            -


                                     Year ended 31st December 2009

                                         Mining
                            Royalty     Interests   Unallocated     Total
                          (pnds stlg)  (pnds stlg)  (pnds stlg)  (pnds stlg)
                             '000         '000         '000         '000

    Income                     20,334            -           13       20,347
                          ------------ ------------ ------------ ------------

    Profit on sale of
     mining and exploration
     interests                      -        6,367            -        6,367
    Interest received               -            -          796          796
    Depreciation                    -            -          (12)         (12)
    Tax                             -            -       (5,252)      (5,252)
    Share of profits of
     associates                     -          515            -          515
                          ------------ ------------ ------------ ------------
    Segment Result             20,334        6,882       (6,585)      20,631
                          ------------ ------------ ------------ ------------

    Segment Assets            177,201      115,082       20,172      312,455
    Segment Liabilities       (47,475)        (408)      (4,536)     (52,419)
                          ------------ ------------ ------------ ------------
    Net Segment Assets        129,726      114,674       15,636      260,036
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------

    Capital Expenditure             -           88           80          168
    Exploration and
     evaluation expenditure         -          367            -          367


    Revenue consists of Royalty income and other operating income. Royalty
    income is currently generated in Australia.

    5.  Own shares held

    Following approval at the 2009 Annual General Meeting the Company
    established the Anglo Pacific Group plc Employee Benefit Trust (the
    "Trust") to be used as part of the remuneration arrangement for
    employees. The purpose of the Trust is to facilitate and encourage the
    ownership of shares by or for the benefit of employees by the acquisition
    and distribution of shares in the Company.

    The Company issued 508,050 ordinary 2p shares during the period, to
    satisfy its obligations under its Joint Share Ownership Plan.

    At 30th June 2010 the Trust held 508,050 (2009 nil) ordinary 2p shares in
    Anglo Pacific Group plc.

    6.  Events occurring after the period end

    On 9th July 2010 the Group's ordinary shares were admitted to trading on
    the Toronto Stock Exchange under the symbol APY.

    7. Availability of financial statements

    This statement will be sent to shareholders and will be available at the
    Company's registered office at 17 Hill Street, London, W1J 5NZ.


                           Anglo Pacific Group PLC

             INDEPENDENT REVIEW REPORT TO ANGLO PACIFIC GROUP PLC

    -------------------------------------------------------------------------
    

Introduction

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2010 which comprises the consolidated income statement, consolidated statement of comprehensive income, consolidated balance sheet, consolidated statement of changes in equity, consolidated statement of cash flow and notes 1 to 7. We have read the other information contained in the half yearly financial report which comprises only the Chairman's statement and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with guidance contained in ISRE (UK and Ireland) 2410, 'Review of Interim Financial Information performed by the Independent Auditor of the Entity'. Our review work has been undertaken so that we might state to the company those matters we are required to state to them in a review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusion we have formed.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

As disclosed in Note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting,' as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2010 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

    
    GRANT THORNTON UK LLP
    CHARTERED ACCOUNTANTS
    London
    26th August 2010
    

%SEDAR: 00030202E

SOURCE ANGLO PACIFIC GROUP PLC

For further information: For further information: Anglo Pacific Group plc, +44 (0) 20 7318 6360, Peter Boycott, Chairman, Matthew Tack, Finance Director; Liberum Capital, +44 (0) 20 3100 2000, Chris Bowman, Ellen Francis; Scott Harris, +44 (0) 20 7653 0030, Stephen Scott, James O'Shaughnessy; Website: www.anglopacificgroup.com

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