Any near-term concerns about Anglo Pacific's (APF) income case evaporated this week in a very strong fourth-quarter update. A 240 per cent increase in annual royalty income means the dividend is now comfortably covered, and could rise in 2017, especially after another quarter of strong coking coal prices. And, while these should soften in the coming months, the royalty stream from Rio Tinto 's (RIO) Kestrel mine is set to contribute an even greater proportion of earnings in 2017.
What's more, Anglo is now net debt neutral, and with the bumper royalty cheques coming in, it may look to finance the acquisition of new royalty streams. Chief executive Julian Treger told us he is bullish about copper and uranium, and would be open to opportunities in iron ore projects - despite the forecast for a price crunch this year and next.
