Anglo Pacific Group plc’s (LON:APF) share price got a lift as it reversed its estimate for royalty income from the Kestrel coal field in Australia.
Anglo‘s income comes from royalties from mining assets, one of which is the Kestrel coal mine in Australia.
Kestrel, in Queensland, is operated by mining giant Rio Tinto PLC (LON:RIO), but Anglo owns 50% of tracts of land at the site that entitle it to coal royalty receipts depending on how much mining takes place on its land.
Rio has now told Anglo how much that was in the second quarter of 2016.
And, along with the first quarter, means coal sales from royalty land in the first half will be in the region of 35-40%.
That compares with a lowered estimate of 20-25% made just a few weeks ago.
Overall, Anglo still expects 60-65% of Rio’s production at Kestrel this year to come from its chunk of royalty land but the outcome may now be at the top of this range.
Also, Rio has forecast that 90% of 2017 production will be on Anglo’s royalty land.
“This, along with both the recent weakening of the pound against the Australian dollar and an increase in the coking coal benchmark contract price so far in 2016, should have a positive impact on the Group's reported royalty income," Anglo said.
Share rose 8% to 94p.