Mr. Julian Treger reports

ANGLO PACIFIC GROUP PLC Q3 2015 TRADING UPDATE

Anglo Pacific Group PLC is issuing the following trading update for the period from July 1, 2015, to Nov. 25, 2015. Unless otherwise stated, all unaudited financial information is for the quarter ended Sept. 30, 2015.

Highlights

• Royalty-related income of 1.9 million British pounds in third quarter 2015 (Q3 2014: 500,000 British pounds) despite headwinds in the price of commodities;
• Royalty-related income of 5.7 million British pounds for the nine months ended Sept. 30, 2015 (nine months ended Sept. 30, 2014: three million British pounds and fiscal year 2014: 3.5 million British pounds);
• Successful completion of longwall changeouts at both Kestrel and Narrabri in the period, leaving full year production targets unchanged;
• Positive developments for the group's Narrabri and Salamanca royalties;
• Cash and cash equivalents of 3.6 million British pounds as at Sept. 30, 2015 (June 30, 2015: four million British pounds);
• Total quoted equity interests valued at 7.4 million British pounds as at Sept. 30, 2015 (June 30, 2015: 6.5 million British pounds);
• Borrowings of 8.6 million British pounds as at Sept. 30, 2015 (June 30, 2015: 2.6 million British pounds);
• Net assets of 161.4 million British pounds at Sept. 30, 2015 (June 30, 2015: 171.0 million British pounds).

Julian Treger, chief executive officer of the company, commented:

"We are pleased to build on the half-year performance and report a significant increase in royalty income compared to the third quarter of last year. The increase in the group's royalty income is largely due to the royalty income received from the Narrabri royalty, acquired in the first half of the year, and has been achieved in a period where commodity prices have remained under significant pressure.

"With longwall changeouts successfully completed at both Kestrel and Narrabri, we are expecting a strong finish to 2015. There have also been additional positive developments at our Narrabri and Salamanca royalties following the end of the quarter, which have the potential to significantly enhance our near-term royalty flows.

"Our move to the standard listing on the main market creates greater flexibility as we continue to grow the business, whilst still providing shareholders with a high level of protection. We continue to work hard to identify and appraise new royalty opportunities which will complement our existing portfolio and further the considerable progress we have made this year."

Portfolio update

Planned longwall changeouts at both Kestrel and Narrabri impacted production at the group's two main royalties in the third quarter. Both changeouts completed on time and will therefore not impact total expected production and income for the year. Anglo Pacific's guidance in relation to production at Kestrel within the group's royalty land remains unchanged.

Significant news followed the quarter ended Sept. 30, 2015, with the positive updates from Berkeley Energy, which continues to make exceptional progress at its Salamanca project, suggesting potential upside for both Anglo Pacific's royalty and equity interests. In addition, Whitehaven Coal announced that it is to apply for consent to mine up to 11 million tonnes per annum (Mtpa) of coal at Narrabri, a large increase to the current permitted levels of production (eight Mtpa), which has the potential to significantly enhance the group's near-term royalty flows.

Kestrel

In line with Anglo Pacific's expectations, Rio Tinto announced Kestrel mine Q3 2015 production of 540,000 t of hard coking coal and 110,000 t of thermal coal run of mine (ROM), compared with 940,000 t of hard coking coal and 180,000 t of thermal coal during second quarter 2015.

Production rates at Kestrel were lower during Q3 2015 due to the planned longwall changeout which was announced by Rio Tinto in the company's half-year results for 2015. The longwall changeout has not affected Anglo Pacific's second half 2015 guidance range of 70 per cent to 75 per cent of production within Anglo Pacific's royalty area.

Anglo Pacific expects total production at the Kestrel mine to recover during fourth quarter 2015 as production rates continue to improve toward nameplate longwall capacity of around six Mtpa.

On Nov. 16, 2015, several Australian media publications reported that Rio Tinto had applied for an extension of its mining licence at Kestrel. As part of this application, Rio Tinto was reported to have told the Australian federal government that it would close the Kestrel mine if the application was refused. The group has reviewed the Rio Tinto application in detail and believes that it is part of the normal permitting process for an extension of the existing mining licence to cover the full extent of the mine plan.

The application for licence extension relates to the 500 series longwall panels which are due to be mined at the back end of its expected mine life and are largely outside of the Anglo Pacific royalty area. Rio Tinto has not commented on the timing of any closure, and the company does not believe this would occur before the completion of any permitted reserves in the current mine schedule. The group believes this will have little or no impact on its Kestrel royalty.

Narrabri

During the third quarter, Whitehaven Coal announced that a planned longwall changeout was successfully completed at Narrabri. ROM coal production for the quarter was one Mt, down 52 per cent compared with 2.1 Mt in the quarter ended Sept. 30, 2014. Narrabri production was impacted by the scheduled longwall changeout, therefore quarterly production is not fully comparable with the same quarter of the previous year, during which no longwall changeout occurred. Saleable coal production for the quarter was 1.6 Mt, with coal sales of 1.6 Mt. The sale of coal inventories resulted in coal sales exceeding ROM coal production.

On Oct. 30, 2015, Whitehaven Coal announced that it was seeking approval for an 11 Mtpa production limit at the Narrabri mine. If granted, this has the potential to lead to significantly increased production at the mine, ahead of the levels of annual production included in the group's calculations at the time it acquired the royalty. The acceleration of production is one source of additional value which the group seeks as part of any royalty acquisition and it is encouraging that Narrabri is outperforming the group's expectations at current and planned future production levels.

EVBC

EVBC continues to produce at a steady rate for the group. On Nov. 13, 2015, Orvana Minerals announced that it had met its updated 2015 production guidance with 53,733 ounces of gold, a decrease in production of about 14.5 per cent compared with fiscal 2014. Orvana noted that the weaker euro had impacted positively on its costs.

Maracas

The group's royalty income has been impacted by the decline in the vanadium pentoxide price throughout 2015, which has now dropped to about $2.40 per pound. In spite of this, production at the mine continues to ramp up, and Largo Resources announced that it achieved a production record of 110 per cent of nameplate capacity for a short period in August. Although operating costs continue to fall, and should fall further as production increases, these remain above the current vanadium price.

Salamanca

Anglo Pacific is encouraged by Berkeley Energy's decision, as published on Nov. 4, 2015, to accelerate the development of the Salamanca project, with site works now expected to commence in mid-2016. This, combined with the longer mine life, increased grade and a higher-uranium-production profile, should considerably increase the potential value of the group's Salamanca royalty, well in excess of the current carrying value of $4-million (Australian).

Berkeley Energy noted that the inclusion of the Zona 7 deposit into the wider Salamanca project (which previously only included the Retortillo and Alameda deposits) transformed the project economics, with a stated net present value of $871.3-million (U.S.) and an internal rate of return of 93.3 per cent over a mine life of 18 years.

In addition to holding a 1-per-cent net-smelter-return royalty covering all production from Berkeley Energy's Spanish and Portuguese assets, the group also has a 16.75-per-cent disclosed equity interest in Berkeley Energy, which has increased in value throughout 2015. At Sept. 30, 2015, this was carried on the balance sheet at 6.1 million British pounds and the share price has further increased in value by about 12 per cent since.

Royalty income

A key part of the group's strategy is to diversify its sources of royalty income. The group has gone some way to achieving this strategy through its acquisition of the Narrabri royalty, which generated royalty-related income of 2.5 million British pounds, representing 44 per cent of the group's total royalty-related income of 5.7 million British pounds for the nine months ended Sept. 30, 2015 (Sept. 30, 2014: three million British pounds).

Anglo Pacific is encouraged that royalty income for 2015 will be considerably higher than that received in 2014, which, the company believes, represented a low point for its royalty income.

Standard listing

In October, the company completed its planned transition from the premium to the standard segment of the main market of the London Stock Exchange. The transfer was a result of continuing discussions with the U.K. Listing Authority in relation to the appropriate categorization of the company under the listing rules with respect to technical considerations related to the company's royalty business model. After careful consideration of the alternative listing regimes available to the company, the board concluded that remaining on the official list with a standard listing would be the most appropriate listing category.

The move creates greater flexibility as the group continues to grow the business, whilst still providing shareholders with a high standard of protection as a London-listed company. The company retains its Toronto Stock Exchange listing.

Financial position

The group had net assets of 161.4 million British pounds as at Sept. 30, 2015 (June 30, 2015: 171.0 million British pounds, Dec. 31, 2014: 161.3 million British pounds). Cash and cash equivalents, together with trade and other receivables, totalled 9.7 million British pounds as at Sept. 30, 2015 (June 30, 2015: 10.6 million British pounds, Dec. 31, 2014: 14.0 million British pounds), whilst group borrowings were 8.6 million British pounds (June 30, 2015: 2.6 million British pounds, Dec. 31, 2014: nil).

Dividend

The board has declared an interim dividend for 2015 of four pence per share, maintaining the 2014 final dividend per share. This will be paid on Feb. 4, 2016, to shareholders on the register at the close of business on Nov. 27, 2015. The shares were quoted ex dividend in Canada on Nov. 25, 2015, and are quoted ex dividend in London today.