LONDON (Reuters) – Anglo Pacific Group (APF.L) can draw on its $75 million warchest to finance miners struggling to develop copper, lithium or rare earth projects as the coronavirus pandemic has made it even more difficult for junior players to raise cash.
The London-listed company has thrived on other companies’ need for financing, which has been pressing since a deep commodity price crash around 2016. The sector had barely recovered when the novel coronavirus had a massive impact on demand, driving raw materials prices back down.
Anglo Pacific’s profits derive from its acquisition of royalties that give it the right to a share of revenue, profit or production, something companies tend only to sell when they have few other options as it erodes their future earnings.
“As financer to the mining sector, we will see greater opportunities,” Anglo Pacific CEO Julian Treger told Reuters in an interview.
“As we move forward, we have more negotiating leverage and in the second half of the year, we think this will result in some interesting transactions for us.” The company, he added, was reaching out to those hit by lower commodity prices or government-mandated shutdowns.
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