S32 Royalties

South32 CEO Expects to Sell More Non-Core Royalties19/09/2022 10:38AM By Rhiannon Hoyle

South32 Ltd. is likely to sell more of the royalties it holds in other companies' mines and projects as it seeks to create value from the overlooked assets, Chief Executive Graham Kerr said in a recent interview. The Australia-based miner in July sold four royalties in copper and nickel assets to London-listed Anglo Pacific Group PLC for roughly $200 million in cash and stock.

The company said at the time that it held a further 36 royalties, mostly in base metals.

"I'd expect, over time, we'd look to liberate that value as well," Mr. Kerr told The Wall Street Journal. South32 also sold four precious-metals royalties to Elemental Royalties Corp. last year for $55 million in cash and stock. The company has sought to capitalize on periods of strong metal prices and, with the more-recent sale, a growing appetite for base-metals exposure among standalone royalty companies, said Mr. Kerr.

"To be perfectly honest, these were royalties that probably 99% of our investors didn't know that we had, nor did they put any value on it," he said. Mr. Kerr said that any further sales would likely be timed around a mix of commodity-price expectations and project-development milestones.

The royalties are held on assets including Solaris Resources Inc.'s Warintza project and the Mirador mine owned by Ecuacorriente SA, a subsidiary of Chinese consortium CRCC-Tongguan, South32 has said previously.

"Because some of these royalties were sort of in the drawer for a long period of time, clarifying between all the parties exactly how they work is also another part of that process," he said.

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Ash here.

Well, this wont hurt the share price.

An alternative would be for S32 to create its own Royalties division and report these separately, build another business line. It isn't as though S32n is cash constrained.

Ash