Investing in Royalties March 2013 Important Notice and Disclaimer - - PowerPoint PPT Presentation

Investing in Royalties

March 2013

Important Notice and Disclaimer

Certain statements in this presentation, other than statements of historical fact, are forward-looking statements based on certain assumptions and reflect the Company’s expectations and views of future

• events. Forward-looking statements (which include the phrase “forward-looking information” within the

meaning of Canadian securities legislation) are provided for the purposes of assisting the reader in understanding the Company’s financial position and results of operations as at and for the periods ended

• n certain dates, and to present information about management’s current expectations and plans

relating to the future. Readers are cautioned that such forward-looking statements may not be appropriate for other purposes than outlined in this presentation. These statements may include, without limitation, statements regarding the operations, business, financial condition, expected financial results, cash flow, requirement for and terms of additional financing, performance, prospects,

• pportunities, priorities, targets, goals, objectives, strategies, growth and outlook of the Company

including the outlook for the markets and economies in which the Company operates, costs and timing of acquiring new royalties, mineral reserve and resources estimates, estimates of future production, production costs and revenue, future demand for and prices of precious and base metals and other commodities, for the current fiscal year and subsequent periods. In addition, statements relating to “reserves” or “resources” are forward looking statements, as they involve implied assessment, based on certain estimates and assumptions, that the resources and reserves described can be profitably produced in the future. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as “expects”, “anticipates”, “plans”, “believes”, “estimates”, “seeks”, “intends”, “targets”, “projects”, “forecasts”, or negative versions thereof and other similar expressions, or future or conditional verbs such as “may”, “will”, “should”, “would” and “could”. Forward-looking statements are based upon certain material factors that were applied in drawing a conclusion or making a forecast or projection, including assumptions and analyses made by the Company 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. The material factors and assumptions upon which such forward-looking statements are based include: the general economy is stable; local governments are stable; interest rates are relatively stable; equity and debt markets continue to provide access to capital; the ongoing operations of the properties underlying the Company’s portfolio of royalties by the owners or operators of such properties in a manner consistent with past practice; the accuracy of reserve and resource estimates, grades, mine life and cash cost estimates; the accuracy of public statements and disclosures made by the owners or operators of such underlying properties; no material adverse change in the market price of the commodities that underlie the Company’s portfolio of royalties and investment interests; no adverse development in respect of any significant property in which the Company holds a royalty or other interest; the successful completion of new development projects; the accuracy of publicly disclosed expectations for the development of underlying properties that are not yet in production; planned expansions or other projects within the timelines anticipated and at anticipated production levels; and title to mineral

• properties. Forward-looking statements are not guarantees of future performance and involve risks,

uncertainties and assumptions, which could cause actual results to differ materially from those anticipated, estimated or intended in the forward-looking statements. By its nature, this information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate; that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. A variety of material factors, many of which are beyond the Company’s control, affect the operations, performance and results of the Company, its businesses and investments, and could cause actual results to differ materially from those suggested any forward-looking information. For additional information with respect to such risks and uncertainties, please refer to the “Risk Factors” section of our most recent Annual Information Form available on www.sedar.com and the Group’s website www.anglopacificgroup.com. If any such risks actually occur, they could materially adversely affect the Company’s business, financial condition or results of operations. The reader is cautioned that the list of factors noted in the section herein entitled “Risk Factors” is not exhaustive of the factors that may affect the Company’s forward-looking

• statements. The reader is also cautioned to consider these and other factors, uncertainties and

potential events carefully and not to put undue reliance on forward-looking statements. This presentation also contains forward-looking information contained and derived from publicly available information regarding properties and mining operations owned by third parties. The Company’s management relies upon this forward-looking information in its estimates, projections, plans, and analysis. Although the forward-looking statements contained in this presentation are based upon what the Company believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. The forward-looking statements made in this presentation relate only to events or information as of the date on which the statements are made and, except as specifically required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or

• therwise, after the date on which the statements are made or to reflect the occurrence of

unanticipated events. This presentation contains reference to past prices of and/or yields on the Company’s shares. Readers are reminded that past performance cannot be relied on as a guide to future performance.

1. Overview of Anglo Pacific

Who we are:

Anglo Pacific is the only mining royalty company listed on the LSE

• Broad commodity exposure including:
• Steel raw materials (hard coking coal, iron ore, chromite)
• Energy (uranium, thermal coal)
• Precious metals (gold, PGM)
• Base metals (copper, nickel)
• Focused on countries with a good legal jurisdiction
• No gearing or hedging
• Strong cash flow and earnings on long life projects
• Progressive dividend policy

3

What we offer:

An alternative source of finance to mining companies from which our shareholders get:

• Top line exposure to mining company revenues
• Reduced exposure to cost inflation and reduced balance sheet risk
• Opportunity to benefit from ongoing growth in mineral resources
• Diversification across commodities
• Security of a portfolio of established mining operations

4

How we do it:

Acquire existing royalties from third parties

• Four Mile Uranium (1% NSR) acquired from IMX Resources in May 2009
• Amapà Iron Ore (1% GRR) acquired from Beadell Resources in December 2010
• Ring of Fire Chromite (1% NSR) acquired from KWG in August 2011

Establish new royalty agreements with the current operator (for cash)

• El Valle Copper & Gold (2.5% NSR) agreed with Kinbauri in March 2008
• Jogjakarta Iron (2% NSR agreed with Indo Mines in June 2009
• Isua Iron Ore (1% GRR) agreed with London Mining in August 2011

5

Current royalty portfolio

6

Commodity exposure at December 31, 2012

7

Coal 100%

Royalty Interests (£266m) Strategic Mining Interests (£56m)

Note – Unlisted investments included at cost

Gold

6%

Uranium

6%

Iron Ore

14%

Coking Coal

73%

Other

9%

Iron Ore

18%

Gold

28%

Gold 26% Uranium 16% Coking Coal 65% Gold 5% Iron Ore 23% 2%

Coking Coal 64% Gold 5% Iron Ore 24% Uranium 2% Chromite 5% Copper 4% Gold 30% Iron Ore 19% Nickel 15% Other 7% Platinum Group Metals 2% Uranium 19% Oil & Gas 4%

Building the portfolio:

We focus on:

• Long term projects – 10 years plus
• Experienced and reputable mining operators
• Good legal jurisdictions
• Diversification of commodities with good pricing visibility
• Open ended projects with potential blue sky

8

9

Progress to date:

• 20

30 80 130 180 230 280 330 100 200 300 400 500 31.12.08 31.12.09 31.12.10 31.12.11 31.12.12 Pence per share £ million Coal royalties Other royalty investments Cash and Investments Other assets Valuation of royalties NAV per share Adjusted NAV per share

New:

• El Valle
• Engenho

New:

• Beverly
• Four Mile
• Highbank
• Eastbank
• Midway

McKenzie

• Salamanca
• Jogjakarta

New:

• Railway
• Amapa
• Tucano
• Bulqiza
• Araguaia

New:

• Ring of

Fire

• Isua

New:

• Mount Ida
• Churchrock
• Hummingbird

Timetable for growth

2013 2014 2016 2015

Current key royalty pipeline

(refer to appendices and end notes for source)

Isua London Mining PLC 1% GRR

• Magnetite concentrate
• Target 15Mt per year

Araquaia option Horizonte Minerals PLC (Teck 44%) 1.5% NSR

• Nickel laterite

Salamanca Berkeley Resources 1% NSR

• Uranium

Ring of Fire Cliffs Natural Resources 1% NSR

• DSO & concentrate
• Target ~2Mt per annum

concentrate and ferrochrome feed Railway BHP Billiton 1.5% GRR

• DSO iron ore

Jogjakarta Indo Mines Ltd 2% NSR

• Initially 2Mt iron

sand concentrate per year Kestrel coking coal expansion Rio Tinto Ltd 7% to 15% GRR

• Increase to ~5.7Mt

per year - commence late 2015 Mount Ida Jupiter Mines 0.75% GRR

• Magnetite

concentrate 10mtpa

2017

Four Mile Quasar Resources / Alliance Resources 1% NSR

• ISR Uranium
• Target 3Mlb to

5Mlb per year

10

2018+

Churchrock option Laramide Resources 5% GRR

• ISR Uranium

Tucano Beadell Resources 1% GRR

• Target 500Kt of iron ore

concentrate per year

2. Royalty portfolio progress

Producing royalties

Kestrel Coking Coal (Queensland): Operator – Rio Tinto

• Kestrel produced a lower tonnage of coking coal applicable to the private royalty ground during

2012 (approx 2.7mt v 3.8mt in 2011)

• Q1 2012 mined production was affected by a longwall changeover
• Q4 2012 sales output was affected by a shutdown of the coal preparation plant, as part of

Kestrel’s mine expansion project

• Benchmark hard coking coal prices fell from $235 fob in Q1 2012 to $170 fob in Q4 2012
• Royalty rates were increased by the Queensland Government effective October 1, 2012
• Kestrel Extension is underway to increase capacity, with increased production from the Group’s

private royalty area expected from 2016 onwards

12

Producing royalties (cont.)

Amapá Iron Ore – Continuing good progress

• Production of approx 6.1mt of pellet and sinter feed in 2012 (2011: 5.1mt)
• Royalty revenues of £2.2m (2011: £2.7m)
• 1% GRR royalty
• Operated by Anglo American - currently negotiating the sale of the mine to Zamin Ferrous

El Valle Boinas/Carles Copper and Gold – Moving to full production

• Royalty revenues received of £1.9m (2011: £0.3m)
• New shaft operational allowing production to increase
• Forecast production of 63,000ozs Au, 200,000ozs Ag and 6mlbs Cu in fiscal 2013
• 2.5% NSR royalty escalating to 3% at gold prices above $1100 per ounce
• Operated by Orvana Minerals Corp

13

Development royalties

‘Ring of Fire’ Chromite – Cliffs Natural Resources Inc

• On May 20, 2012 Cliffs announced that the chromite project, located in the Ring of Fire area of

Northern Ontario, is advancing to the feasibility stage

• Production is scheduled to start in 2016 and expected to produce 2.3mt of chromite per annum
• 1% NSR royalty over the Ring of Fire project including the Black Thor and Big Daddy deposits

Jogjakarta Iron Sands and Pig Iron – Indo Mines Ltd 70%

• On October 25, 2012 Indo announced that the Indonesian Ministry of Energy and Mineral

Resources approved the application for the construction phase

• Project to follow a staged implementation to achieve 2mt Fe per annum
• On November 26, 2012 Indo completed a placement to the Rajawali Group resulting in it

becoming the largest shareholder with 57% and Indo receiving $50m

• 2% reducing to 1% NSR royalty

14

Development royalties (cont.)

Four Mile Uranium – Quasar Resources Pty Ltd & Alliance Resources Ltd

• On October 24, 2012 Alliance Resources announced start-up decision
• Operations to commence at Four Mile East during Q2 2013 with first uranium sales in Q3 2013
• 1% NSR royalty

Isua Iron Ore – London Mining Plc

• On January 24, 2013 London Mining announced they had completed the Department of

Minerals and Petroleum’s permitting process requirements for the proposed 15 mtpa Isua iron

• re project
• 1% NSR royalty

15

Development royalties (cont.)

Tucano Iron Ore – Beadell Resources Ltd

• On January 24, 2013 Beadell announced that the magnetic separation plant will produce first

iron ore concentrate in April 2013

• 1% GRR royalty

Araguaia Nickel – Horizonte Minerals Plc

• On August 22, 2012 Horizonte announced its PEA showed strong economics and recommended

moving to a PFS

• Sliding scale 1.1% - 1.5% NSR royalty to be exercised for US$12.5m, at the earliest of completion
• f a PFS or January 10, 2017

16

3. Financial Overview

1) As at December 31, 2012 2) As at February 11, 2013 3) Common shares include shares held by Anglo Pacific Group Employee Benefit Trust which have waived the right to dividends 4) As at February 2013

Corporate overview

18

Listings London (LSE)

APF

Toronto (TSX)

APY

Capital Structure Common

109,605,376

Options

66,435

Fully diluted

109,605,3763

Share price

270p 2

Market capitalisation

~£298M 2

Cash

£24.0M1

2012 FY Earnings per share

9.27p

2012 FY Dividend per share

10.20p

Adjusted net asset value per share

313p1 Top Shareholders1

Directors

14.14%

Liontrust Investment Partners

7.84%

AXA Investment Management

6.36%

Schroder Investment Management4

5.02%

Aberforth Partners

4.62%

BlackRock

4.57%

Total number of shareholders:

~2,500

Income statement overview

19

Figures in £’000 2012 2011 Restated Royalty income 13,267 34,679 Operating expenses (3,633) (3,393) Operating profit 9,292 31,775 Realised gains 7,347 20,303 Profit before tax 14,220 48,451 Profit after tax 10,057 36,280 Earnings per share (Basic) 9.27p 33.51p Dividend per share 10.20p 9.75p

Balance sheet overview

20

Figures in £’000 2012 2011 Restated Non-current assets 327,474 326,544 Cash and cash equivalents 24,036 32,197 Trade and other receivables 1,958 12,298 Total assets 353,468 371,039 Total liabilities (mostly deferred tax) (52,504) (64,867) Total shareholder equity 300,964 306,172

Asset overview

* As the Group owns the physical right to the minerals in its coal royalties, its royalty entitlement is treated as a tangible fixed asset and carried at fair value as calculated by an independent consultant. ** Royalty instruments represent the Group’s royalties which are structured as debentures. As these are financial assets they are carried at their fair value on the balance sheet. *** Intangibles – royalties are carried at amortised cost. Though the expected future cash flows from these royalties may enhance significantly post investment, accounting rules prevent the Group from reflecting this on the balance sheet. The Directors’ valuation represents the future cash flows on a discounted basis which the Group expects to achieve should all of its royalties come into production. This represents the value in use to the Group of its Intangibles - royalties.

Figures in £’000 2012 2011 Restated Coal royalties (Kestrel and Crinum)* 170,995 165,967 Royalty instruments ** 24,032 24,736 Intangibles – royalties *** 70,477 68,334 Total royalty assets 265,504 259,037 Mining and exploration interests 55,793 64,551 Cash 24,036 32,197 Other intangibles (deferred exploration costs) 931 804 Other 7,204 14,450 Total assets 353,468 371,039

21

New World Resources

Strength in dividend policy

• High dividend yield

compared to the FTSE mid cap mining sector

• Progressive dividend policy
• Targeting growth in dividend
• Driven by royalty revenues

African Barrick Gold Centamin Petropavlovsk Kenmare Resources Hochschild Mining Gem Diamonds

Anglo Pacific Dividend Yield FY13 (%)

4% 3% 1% 0%

Market Cap, Current (GBP billion)

2.0 1.0 0.5 Aquarius Platinum 2% 1.5 Ferrexpo Petra Bumi Hochschild Mining

22

Lonmin

Note: Information as at 1 March 2013, based on analyst consensus

Summary:

• Royalties are a smart way of investing in natural resources
• Exposure to revenue, limiting exposure to cost inflation
• No ongoing development costs
• Low overheads leading to strong cash flow and dividend
• Outlook for natural resources remains positive as the drive for urbanisation of the

developing world continues

• Anglo Pacific delivering on its promises to build and diversify its royalty portfolio

23

24

FTSE 350 Mining Index vs FTSE 250 vs Anglo Pacific

Performance over last 5 years

20 40 60 80 100 120 140 160 180 200 220 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Rebased to 100 FTSE 350 Mining Anglo Pacific Group FTSE 250

Appendices

25

Producing royalties

Producing royalty – Kestrel (Coking Coal)

Kestrel Mine

Royalty 7% up to A$100/tonne, 12.5% between A$100/tonne and A$150/tonne and 15% over A$150/ton of gross sales value of coal exported from private ground (royalty rate set by the Queensland Government commencing October 2012). Anglo Pacific has an effective 50%

• wnership of this royalty.

Status Producing since 1992 Operator Rio Tinto Limited Ownership 80% Rio Tinto Ltd / 20% Mitsui Location Queensland, Australia Production (2012) (iv) 2.25 million tonnes of hard coking and thermal coal Royalty Valuation (iv) £171 million (independent valuation)

27

Note: All information based on public disclosure

Kestrel Royalty Receipts £M

5.5 19.2 15.2 21.3 26.1 10.9

0.00 5.00 10.00 15.00 20.00 25.00 30.00 2007 2008 2009 2010 2011 2012

Producing royalty – Amapá (Iron Ore)

Amapá Iron Ore System

Royalty 1.0% GRR iron ore royalty over Amapá Iron Ore System concessions. Acquisition cost A$ 31.3 million which included a royalty over Beadell Resources Ltd’s Tucano concessions Status Producing since 2008 Operator Anglo American PLC Ownership Anglo American PLC 70% / Cliffs Natural Resources Inc 30% Location Amapá region of northern Brazil (15km from the town of Pedra Branca do Ampari, 200km rail link to port at Santana) Production 2012(v) 6.07 Mt iron ore pellet feed, sinter feed and spiral concentrates Expansion(v) 6.5Mt – subject to feasibility and financing Resources (v) Measured 48.1 million tonnes @ 41% Fe Indicated 178.5 million tonnes @ 41% Fe Inferred 45.9 million tonnes @ 38% Fe Royalty Receipts £2.2 million (2012)

28

Note: All information based on public disclosure

Producing royalty – El Valle (Gold and Copper)

29

El Valle Boinas/Carles Mine

Royalty 2.5% NSR royalty which increases to 3% above US$1,100 per ounce gold price – acquisition cost C$7.5m Status Production commenced July 2011 Operator Orvana Minerals Corp Location Northern Spain Production FY 2012(vi) 42,863 ounces of gold, 3.95m lbs of copper and 117,113 ounces of silver Mine Life(vi) To 2022 Resources (vi) Measured 2.7 million tonnes at 3.99 g/t Au & 0.75% Cu, Indicated 5.6 million tonnes at 5.26 g/t Au & 0.60% copper, Inferred 8.4 million tonnes at 4.88 g/t Au and 0.39% Cu. Using a 2.0 g/t Au cut-off Reserves (vi) Proved 1.9 million tonnes @ 2.97 g/t Au & 0.65% Cu Probable 5.7 million tonnes @ 3.40 g/t Au & 0.47% Cu Royalty Receipts £1.9 million (2012)

Note: All information based on public disclosure

Development royalties

Development royalties – Steel raw materials

Tucano – Iron Ore – Brazil

Royalty 1.0% GRR iron ore royalty Status Operating gold mine and iron ore exploration Operator Beadell Resources Limited Location Amapá region of northern Brazil adjacent to Anglo American PLC’s Amapá iron ore mine. Resources(vii) Measured and Indicated 75.4 million tonnes @ 37.3% Fe Inferred 133.7 million tonnes @ 35.4% Fe Acquisition Cost A$31.3m, including the royalty over Anglo American PLC’s Amapá Iron Ore System concessions

31

Note: All information based on public disclosure

Railway – Iron Ore – Australia

Royalty 1.5% GRR – acquisition cost A$23 million Status The Railway deposit is adjacent to BHP’s Area C operation and is expected to form part of its expansion in the Pilbara Operator BHP Billiton Limited Resources (viii) Indicated 100 million tonnes @ 60% Fe Inferred 57 million tonnes @ 59% Fe Acquisition Cost A$23.0m

Development royalties – Steel raw materials

Note: All information based on public disclosure

Jogjakarta – Iron Sands – Indonesia

Royalty 2% NSR reducing to 1% NSR after repayment of principal. Remains 2% NSR if pig iron price is more than $700 per tonne – acquisition cost A$5.0m Operator Indo Mines Ltd Production Target(i) Feasibility for 2 million tonne per annum iron sand concentrate operation completed in 2011. Production targeted to commence by the end of 2012. 1 million tonne per annum pig iron project in feasibility Mine Life N/A Resources (i) Measured 115.6 million tonnes @ 13.9% Fe Indicated 134.9 million tonnes @ 14.5% Fe Inferred 22.5 million tonnes @ 14.0% Fe Reserves (i) Probable 163.5 million tonnes at 13.7% Fe Surface Sand Unit (above the assumed water table).

32

Isua – Iron Ore – Greenland

Royalty 1% GRR – acquisition cost US$30m Operator London Mining PLC Website www.londonmining.co.uk

Development royalties – Steel raw materials

33

‘Ring of Fire’ – Chromite – Canada

Royalty 1% NSR – acquisition cost US$18m Operator Cliffs Natural Resources Inc Production Target(ix) 1mtpa of export chromite with a further 600ktpa of ferrochrome to start production in 2015. Advance to feasibility stage approved in May 2012. Mine Life(ix) 25 to 35 years Resources (ix) Black Thor: Inferred 69.5 million tonnes @ 31.9% Cr2O3 Big Daddy : Indicated 23.2Mt @ 40.7% Cr2O3 Inferred 16.3Mt @39.1% Cr2O3

Note: All information based on public disclosure

NEW PHOTO NEW PHOTO

Bulqiza – Chromite – Albania

Royalty 3% NSR – acquisition cost C$3.1m Operator Columbus Copper Corporation

Development royalties – Steel raw materials

Note: All information based on public disclosure

Araguaia – Nickel – Brazil

Royalty 1.5% NSR royalty option – acquisition cost US$0.5m Exercise price US$12.5 million Operator Horizonte Minerals PLC Production Target (x) PEA outlines life of mine average Ni production of 23.7 kt per annum using Rotary Kiln Electric Furnace (‘RKEF’) processing plant option Resources (x) Indicated 39.3 million tonnes @ 1.39% Ni Inferred 60.9 million tonnes @ 1.22% Ni

34

Mount Ida – Iron Ore – Australia

Royalty 0.75% GRR option – acquisition cost US$14m in staged payments, US$6m paid followed by US$4m on decision to mine and initial financing, with final US$4m payment on commercial production. Production Target (iii) Scoping study outlines a 10mtpa magnetite concentrate production grading 68-69% Fe with low impurities. Operator Jupiter Mines (vendor Red Rock Resources) Resources (iii) Indicated resource 1062 million tonnes at 30.23 % Fe Inferred resource 785 million tonnes at 28.46 % Fe

Development royalties – Energy

Four Mile - Uranium – Australia

Royalty 1% NSR royalty - acquisition cost A$6.0 million Operator (ii) Quasar Resources Pty Limited (75%) , Alliance Resources Limited (25%) Production Target 3 to 5 million pounds per annum U3O8 Resources (ii) Indicated 32 million pounds @ 0.34% U3O8 Inferred 38 million pounds @ 0.31% U3O8

Salamanca – Uranium – Spain

Royalty 1% NSR royalty – acquisition cost A$4.0 million Operator Berkeley Resources Limited Website www.berkeleyresources.com.au

Note: All information based on public disclosure

35

Development royalties – Precious metals

Dugbe - 1 - Gold – Liberia

Royalty 2.0% - 2.5% NSR royalty variable - acquisition cost $15.0 million Operator Hummingbird Resources PLC Website www.hummingbirdresources.co.uk

Note: All information based on public disclosure

36

Private coal interests

Anglo Pacific Strategy

• Long term objective to take the Canadian

projects to scoping study level and then bring in joint venture partners and retain a carried interest and royalty entitlement

• Total investment to date: £2m

Trefi Coal Project, BC – Canada

• 15 coal exploration licenses and 3 applications

(7,377 hectares)

• NI 43-101 Measured coal resource of 14.25Mt

and Indicated coal resource of 25.1Mt suitable for both thermal and PCI coal markets(xi)

• Additional Inferred resource of 51.60Mt(xi)
• Potential 3% GRR

Panorama Coal Project, BC – Canada

• 20 coal exploration licenses (9,099 hectares)
• Initial NI 43-101 Indicated coal resource of

13.7Mt suitable for both thermal and PCI coal markets(xi)

• Additional Inferred resource of 24.1Mt(xi)
• Potential 3% GRR

Trefi Project Map

37

Chetwynd

Other information

Royalties explained

Net Smelter Return (NSR)

• A royalty based on the gross metal production from the property, less deduction of certain

limited costs including smelting, refining, transportation and insurance Gross Revenue Royalty (GRR)

• Generally more suitable for bulk commodities such as coal or iron ore where the royalty

may be a simple percentage of the value of the ore shipped from the mine before subsequent treatment charges

• May be based on mine gate, invoiced or free-on-board price

39

A royalty is an entitlement to an agreed percentage of a project’s sales revenue normally without direct liability for operating costs or capital expenditure

Benefits from owning royalties

• Low operational risk
• No balance sheet liability
• A direct link to revenue, not profits

– Limited exposure to operating cost inflation – No exposure to capital cost

• Revenue upside due to:

– Expansion of mineral resources – Commodity price increases

• Limited overheads needed to generate new opportunities and administer the business

40

Experienced management

Peter Boycott Director Appointed to the board in May 1997 and Chairman in June 1997. He has a MA in Mechanical Sciences from the University of Cambridge and is a Chartered

• Accountant. During his career he has been involved as Finance Director and

substantial shareholder in a number of private investment and property groups including engineering and manufacturing companies supplying thermal processing systems to major mining groups. He has been a director of several public companies quoted in Australia and Canada. He is currently taking a leave of absence from his role as Chairman for health reasons.

41

John Theobald Director and Chief Executive Officer Joined the Group as Chief Operating Officer in April 2008, joined the board in June 2009 and was appointed Chief Executive Officer on October 6, 2010. He is a Chartered Engineer with a BSc Honours in Geology from the University of Nottingham. He is a Fellow of the Geological Society and Member of the Institute of Materials, Minerals and Mining and a Member of the Institute of Directors. Prior to joining the Group he held senior

• perational and new business positions with the major industrial minerals

group SCR-Sibelco, he has also worked in the junior resource sector and for major companies such as Anglo American, Phelps Dodge and Iscor covering a wide range of metals, coal and industrial minerals. He has been a director of several public companies quoted in Canada. Brian Wides Acting Chairman and Director of International Business Development Joined the board in June 1997 and was appointed Finance Director in September 1997. In July 2006 he was appointed Chief Executive Officer and on October 6, 2010 was appointed Director of International Business Development after standing down as CEO. He has a Bachelor of Commerce from the University of Witwatersrand and is a Chartered Accountant (South Africa). His specialist experience includes corporate finance, management consultancy and creating shareholder value for a large spectrum of private and public companies in the UK, Australia and Canada. Chris Orchard Director and Chief Investment Officer Joined the Group as Chief Investment Officer in December 2007 and was appointed to the Board in June 2009. He has a BSc Honours in Mining from the University of Leeds and is a Member of the Chartered Institute of Securities Investment. After graduating he worked in the South African mining industry and on returning to the UK spent twenty years as an investment banker in the City specializing in the resources sector. He was Managing Director of Hambros Equity UK, a Director of RBC Dominion Securities and prior to joining the Group managed the investment operations

• f a private wealth management firm. He has been a director of several

public companies quoted in Canada and Australia.

Accounting treatment

Valuation of Royalties

• Coking coal royalties recorded at independent valuation
• Royalty instruments recorded at fair value using director valuations
• Royalty intangibles recorded at cost under IFRS
• Royalty options recorded at cost

42

Coal Royalties £'000 Royalty Instruments £'000 Royalty Intangibles £'000 Royalty Options £'000 Total £'000 December 31, 2012 Number 2 4 10 5 21 Amortised cost 196 12,493 70,477 728 83,894 Valuation 170,995 24,032 131,055 728 326,810

Note: This table does not include the Hummingbird Royalty Financing agreement. This transaction was announced in 2012, no amounts have been paid as at the balance sheet date, therefore neither forms part of amortised cost nor valuation

Corporate history

Company foundation

• Originally floated on London’s Unlisted Securities Market as North Sea and General Oil Investments (“NSG”) in

1984, to invest in oil and gas opportunities

• In April 1989, the Company was restructured in a transaction involving Apex Securities Limited and Oceanic

Equity Limited to acquire Australian oil, gas and mining assets

• NSG listed on the ASX in 1988 and changed its name to Anglo Pacific Resources in 1989

Anglovaal control

• South African mining house Anglovaal purchased a 29.9% interest, gaining quasi-control in 1989
• The Company acquired industrial mineral assets and operations in the UK and Northern Ireland
• Anglo Pacific Resources moved to the Official List in London in 1996
• Anglovaal sold its interest in 1997

New management

• Following Anglovaal’s withdrawal in 1997 new management including Peter Boycott and Brian Wides took
• ver rationalising the assets (1997-2001)
• The Company changed its name to Anglo Pacific Group in 1997
• The current strategy focusing on mineral royalties and strategic investments was put in place from 2001
• nwards

43

Endnotes

Standards of disclosure for mineral projects National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) contains certain requirements relating to the use of mineral resource and mineral reserve categories of an “acceptable foreign code” (as defined in NI 43-101) in “disclosure” (as defined in NI 43-101) made by Anglo Pacific Group PLC with respect to a “mineral project” (as defined in NI 43-101), including the requirement to include a reconciliation of any material differences between the mineral resource and mineral reserve categories used under an acceptable foreign code and the standards developed by the Canadian Institute of Mining, Metallurgy and Petroleum, as the CIM Definition Standards on Mineral Resources and Mineral Reserves adopted by CIM Council, as amended (the “CIM Standards”) in respect of a mineral project. Pursuant to an exemption order granted to Anglo Pacific Group PLC by the Ontario Securities Commission (the “Exemption Order”), the information contained herein with respect to the projects referenced in notes i, ii, iii, v, vii and viii below has been extracted from information publicly disclosed, disseminated, filed, furnished or similarly communicated to the public by an issuer whose securities trade on a “specified exchange” (as defined under NI 43-101) that discloses mineral reserves and mineral resources under one of the JORC Code, the PERC Code, the SAMREC Code, SEC Industry Guide 7

• r the Certification Code (each as defined in NI 43-101). As the definitions and standards of the

JORC Code, the PERC Code, the SAMREC Code, SEC Industry Guide 7 and the Certification Code are substantially similar to the CIM Standards, a reconciliation of any material differences between the mineral resource and mineral reserve categories reported under the JORC Code, the PERC Code, the SAMREC Code, SEC Industry Guide 7 and the Certification Code, as applicable, to categories under the CIM Standards is not included and no Form 43-101F1 technical report will be filed to support the disclosure based upon such exemption. Cautionary note to U.S. investors concerning estimates of measured, indicated and inferred resources: Certain technical disclosure in this presentation has been prepared in accordance with the requirements of Canadian securities laws, including NI 43-101, in certain cases as modified by the Exemption Order referred to above, which differ from the requirements of U.S. securities

• laws. This press release uses the terms “measured resources”, “indicated resources” and

“inferred resources”. U.S. investors are advised that while such terms are recognised and required by Canadian Securities laws, the Securities and Exchange Commission does not recognise them. “Inferred resources” have a great amount of uncertainty as to their existence and as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred resource will be upgraded to a higher category. Under Canadian Securities laws, estimates of inferred resources may not form the basis of feasibility or other economic studies. U.S. investors are cautioned not to assume that all or any part of measured resources or indicated resources will ever be converted into reserves. U.S. investors are also cautioned not to assume that all or any part of an inferred mineral resource exists, or is economically or legally mineable. i. Indo Mines Limited is listed on the Australian Securities Exchange and reports in accordance with the JORC Code. Resource from Indo Mines Limited 2006 Annual Report. Reserve from ASX filing dated August 29, 2011 . Production target from ASX filing dated August 29, 2011. ii. Alliance Resources Limited is listed on the Australian Securities Exchange and reports in accordance with the JORC Code. Four Mile resource from Alliance Resources Limited announcement dated January 27, 2010. Decision on recommencement of development which included the production target, announced on October 24, 2012. iii. Jupiter Mines Limited is listed on the Australian Securities Exchange and reports in accordance with the JORC Code. Mount Ida information extracted from Jupiter Mines Limited filings on ASX with resource announced September 4, 2012 and January 8 2013. Production target from the scoping study on March, 15 2011. iv. Production data and expansion plan information from Rio Tinto Limited public disclosures. Independent valuation report prepared for Anglo Pacific Group PLC by Resource Management International Pty Ltd. v. Anglo American PLC is listed on the London Stock Exchange, the JSE Securities Exchange South Africa, the SWX Swiss Exchange, the Botswana Stock Exchange and the Namibian Stock Exchange. The Amapa resources were disclosed in the Anglo American PLC 2011 Annual Report and were compiled in accordance with the JORC Code. Production data are from Anglo American PLC production report announced January 25 2013. vi. El Valle Boinas/Carles reserves, resources and mine life extracted from Orvana Minerals Corp.’s (“Orvana’s”) NI43-101 Technical Report dated March 8, 2012 (effective date: November 10, 2011) . Production for FY 2012 - Press Release October 18, 2012 and August 13, 2012. vii. Beadell Resources Limited is listed on the Australian Securities Exchange and reports in accordance with the JORC Code. The Tucano iron ore resource was announced by Beadell Resources Limited on August 29, 2011. viii. Railway resources from ASX filing by United Minerals Corp dated September 21, 2009. United Minerals Corp was listed on the Australian Securities Exchange and reported in accordance with the JORC Code. United Minerals Corp was bought by BHP Billiton in 2010. ix. Cliffs Natural Resources Inc is listed on the New York Stock Exchange and reports in accordance with SEC Industry Guide 7. Production targets from Cliffs Natural Resources Inc capital expenditure plan announced January 19, 2012 and announcement of May 9, 2012. Black Thor Resource extracted from Cliffs Natural Resources Inc press release dated Feb 3, 2011. Big Daddy resource extracted from KWG Resources NI 43-101 technical report dated April 12, 2011. x. Araguaia resource extracted from Horizonte Minerals PLC’s (“Horizonte’s”) NI43-101 Technical Report dated February 23, 2012 . Production targets from PEA announced August 22 2012. xi. Scientific and technical information in this presentation relating to Trefi Coal Project is summarised or extracted from “Resource Estimate for the Trefi Coal Property” dated 18 March 2010, prepared by Robert J. Morris, Principal Geologist of Moose Mountain Technical Services, and Robert F. Engler, Principal of Moose Mountain Technical Services, each of whom is a “Qualified Person” in accordance with NI 43-101 and is independent of Anglo Pacific. Scientific and technical information in this presentation relating to Panorama Coal Project is summarised or extracted from “Resource Estimate for the Discovery and Panorama Coal Property” dated 18 March 2010, prepared by Robert J. Morris, Principal Geologist of Moose Mountain Technical Services, and Robert F. Engler, Principal of Moose Mountain Technical Services, each of whom is a “Qualified Person” in accordance with NI 43-101 and is independent of Anglo Pacific. Readers are cautioned not to rely solely on the summaries of such scientific and technical information contained in this presentation, but should read the above-noted technical reports which are posted on the Company’s website (www.anglopacificgroup.com) and filed on SEDAR (www.sedar.com) and any future amendments to such reports. Readers are also directed to the cautionary notices and disclaimers contained in such technical reports.

44

17 Hill Street Mayfair London W1J 5LJ +44 (0) 20 3435 7400 www.anglopacificgroup.com