Mr. Julian Treger reports

ANGLO PACIFIC GROUP PLC : ISUA PROJECT SOLD TO GENERAL NICE

Anglo Pacific Group PLC has provided an update on its 1-per-cent gross revenue royalty over the Isua project located in Greenland.

On Jan. 8, 2015, the government of Greenland announced that it had approved the transfer of all shares of London Mining Greenland (Jersey) (1) Ltd. to General Nice Development Ltd. The Isua project licence is owned by London Mining Greenland A/S, a wholly owned subsidiary of London Mining Greenland.

On Jan. 26, 2015, Anglo Pacific received official confirmation of this from PricewaterhouseCoopers LLP, the administrator of London Mining PLC. Anglo Pacific intends to waive its rights to the repayment of the $30-million (U.S.) advanced to London Mining in 2011 under the change of control provisions of the royalty financing agreement due to the inability of London Mining to make this repayment.

The indirect transfer of the licence means that the company structure of London Mining Greenland A/S remains the same and therefore the royalty will continue to apply to the project.

Julian Treger, chief executive officer, commented: "We are encouraged by this development as we believe Isua remains a viable project in the longer term. We look forward to the progression of the Isua project in the short to medium term under the ownership of General Nice who the government of Greenland has assessed as being able to raise the necessary financing for the development of the exploitation licence, and we anticipate building a strong and mutually beneficial relationship between our companies."

About the transaction

Anglo Pacific owns a 1-per-cent GRR over the Isua project, formerly owned and operated by London Mining, which entered administration in October, 2014. London Mining Greenland A/S retains the licence to exploit iron ore at the Isua project, and 100 per cent of the shares of its holding company, London Mining Greenland, have now been transferred to General Nice. The indirect transfer of the licence means that the company structure of London Mining Greenland A/S remains the same and the royalty will continue to apply to the project.

In the fourth quarter of 2014, Anglo Pacific fully impaired the $30-million (U.S.) advanced under the royalty financing agreement with London Mining following its entry into administration, resulting in a charge of 15.0 million British pounds to the income statement. However, with the Isua project now under the ownership of General Nice, there is scope for recovery of value from this royalty in the future.

Following the transfer of ownership of the Isua project from London Mining to General Nice, Anglo Pacific intends to waive its rights under the change of control provisions of the royalty financing agreement entered into with London Mining to the repayment of the $30-million (U.S.) advanced in 2011 due to the inability of London Mining to make this repayment.

Development of the project is now expected to continue, however a number of licensing issues need to be addressed before construction and operation of the mine can begin. The details of the exploitation and closure plans as well as technical approvals are currently being finalized, and London Mining Greenland A/S, the government of Greenland, and the two municipalities Qeqqata Kommunia and Kommuneqarfik Sermersooq are negotiating an impact benefit agreement. These procedures are all expected by the government of Greenland to be finalized soon.

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