Soaring vanadium price a boon to Anglo Pacific Group PLC, as second largest royalty stream continues to grow

Date: Sep 28, 2018

Vanadium has outperformed the market significantly over the past three years, and Anglo Pacific is benefittng.

What’s been the standout commodity in terms of price performance over the past three years?

Gold? – not likely, given the Fed’s new enthusiasm for raising rates and the consequent strength in the dollar. Copper? – a definite contender, given it’s 25% rise since January 2016, but that performance has been somewhat marred recently by bearish sentiment around President Trump’s ongoing tariff wars. Coal, then? A surprising outlier, with an overall rise of 132% across the last three years, both for the higher quality metallurgical coal and the lower quality thermal variety.

WATCH: Anglo Pacific anticipating ‘significant volume growth’ ahead for portfolio

But the actual answer is Vanadium Pentoxide, the price of which has soared an astonishing 632% since the beginning of 2016.

And what do all these commodities have in common? The answer: with the single exception of gold, they are key components in the royalty portfolio of Anglo Pacific Group PLC (LON:APF)( TSE:APY).

Anglo Pacific has built its presence in the mining royalty space on the back of its coal royalty at the Kestrel mine in Australia. But in the past few years, under the stewardship of chief executive Julian Treger, the company has shown itself willing to branch out into new areas, and to invest in new commodities to diversify its portfolio.

It’s an approach that has paid off for investors in Anglo Pacific in recent months, with the shares at close to three-year highs supported by a chunky dividend. The actual three year high of 166.5p was hit early in May 2018, and the shares have traded up around those levels since then. The current price is 151p, a far cry from the 52.50p low hit in January 2016.

Of course, it’s not all about vanadium, since the wider mining and commodity markets have been on the whole stronger since 2016 across the board.

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