Thank you all for joining the call this morning and for your interest in our company. I will do a brief overview of the interim results and then, as usual, hand over to Kevin Flynn, who will do the financial review. Then it will be followed by Juan Alvarez, who will cover the portfolio developments. Then it will come back to me for a final outlook summary, and then we will take questions and answers. Starting on slide four, as usual these days, with the COVID-19 update. We continue to closely monitor and evaluate the situation with regards to COVID. At this time, all the material mines underlying our royalty-related revenues remain in production. In fact, EVBC, which was off production, came back on earlier, a couple of months ago.
We're pleased to inform you that the McClean Lake royalty, which has been off, should start production in September. All our royalties will be producing that were producing before from Q3. We are also seeing Kestrel benefiting from the recent improvement in coking coal prices, the stabilization of that, and some hopeful recoveries and COVID-related port restrictions being relaxed in India. We also have seen some strong increases in iron ore copper prices in the last quarter, as you will see on the graph to the right. Overall, we think that these challenging operational and capital market conditions for mining companies should present opportunities for us to acquire new royalties and streams. Those were somewhat slower to progress in the last quarter as everything was much more difficult with our due diligence and also counterparties moving more slowly.
Hopefully, in the second half of the year, we will see progress on that front. Turning to slide five, Kevin will go through the contributions from the various portfolio companies to the H1 revenues in further detail. Overall, the figure for income was at GBP 19.1 million, 43% lower than the previous period. That was mainly a result of the significant decrease in coal prices by the COVID-19 pandemic, particularly in Q2. In Q1, the Chinese market was effectively not producing coal, but they were continuing to operate their smelters for iron ore and so the coking coal price was quite high. In Q2, that was reversed, and the Chinese were producing domestically, whereas the rest of the world demand wasn't that high. As the world recovers, we expect coking coal to recover with it.
The impact of the lower coal prices was compounded by the ratcheted basis of our royalty, so there was a lower royalty rate. There were a number of other one-off events, like the conclusion of the Glencore contract that Maracás Menchen, which in short term, hurt us, but long term, should be beneficial with higher margins. Also companies like Labrador Iron Ore taking advantage of the slowdown in Q2 to make more CapEx investments, which also resulted in a lower portfolio contribution.
Those one-off events are highly unlikely to occur again in the second part of the year, and we expect continued recovery in pricing of commodities. In anticipation of that and a stronger outcome in H2, we are maintaining the group's quarterly dividend of GBP 0.0175 per share, in line with our stated objective to return a significant proportion of our income to shareholders as dividends.
Turning now to slide seven, that is a repetition of a slide we showed earlier in the year, which shows the way in which the portfolio contribution has grown over time. Also emphasizes the way in which we have been making acquisitions and diversifying away from the dependence upon Kestrel, so that effectively by last year, we had replaced Kestrel's contribution in 2017 to the business. You'll see that trend very much being emphasized on slide eight, where you can see from 2013 till now, Kestrel has gone from 76% of our assets-As of the 30th of June 2020, it was down to 21% of our asset base on a net after-tax basis. This is the first time in the company's history, for many years, that we have replaced coking coal with another commodity as our primary exposure.
There you can see that our Labrador iron ore investment, as well as our other iron ore investment in the development portfolio, now contributes 31% of our net asset value. You can also see the way in which the geographic exposure has been diversified, and Australia having been 90% is now 41%. Canada has grown significantly to become our second-largest area of exposure. South America has come up as well. Slide nine looks at the way the portfolio would appear if the funding rights that we have to Ecora and Piauí are taken up. Incoa was a high-quality, long-life calcium carbonate project in the Dominican Republic with a processing facility in the U.S., and we've entered into a $20 million financing agreement on that, which is subject to conditions. We expect to be called on that funding in late 2021.
The Piauí is a low-cost nickel and cobalt operation in Brazil, where we have the ability to invest up to GBP 70 million as the project is developed. Including those two commitments, you'll see on the pie chart to the right that base metals would now become 29% of our total commodity exposure, and iron ore would in fact become 25%. I think this illustrates the way in which we are moving quite rapidly to reposition Anglo Pacific as a royalty company for 21st-century materials, which are high quality and are gonna be used to create a green economy. Moving to slide 10. This illustrates the way in which the dividend cover was strong in 2019, and why we are confident in maintaining the dividend at the historic level for the second quarter.
Despite the high dividend payments and the very high yield, the chart on the right illustrates the way in which our EBITDA multiples remain very low in the mid-single digits, as well as the share price compared to NAV continues to trade at well below one times NAV. Page 11 looks at some of the ESG achievements that are occurring within our counterparties. The way in which Labrador Iron Ore is producing pellets, which result in much lower Scope 3 carbon emissions.
You can see that illustrated on the right side of the chart there, making a big difference in carbon emissions by as much as 40%. The rest of the table on the left looks at the way in which Mantos Blancos, our copper royalty, is moving towards renewable power. The vanadium producer, Largo, is reusing its water and using local employment. McClean Lake are mining in a more efficient fashion. With that, I'll hand over to Kevin Flynn to cover the financial review. Kevin.
Thank you, Julian. Good morning, everyone. If we turn to slide 13, which is our key performance indicators. As Julian mentioned, our revenue and portfolio contribution are significantly down in the first half of the year, down 43%. Not surprising to see the impact of that coming through our KPIs. I suppose, looking beyond those, the main reason for this was an unprecedented disruption in coal markets caused by the Indian port restrictions as a result of COVID-19. I think whilst we have made very considerable progress in terms of diversifying away from coking coal, certainly in terms of asset value, as Julian mentioned, with Labrador becoming our largest royalty. For the next couple of years, we would still expect coking coal to represent the majority of our revenue source, whilst the revenue from our other investments made over the past few years kicks in.
A significant disruption in the coal market unfortunately has impacted our earnings in the first half of the year, along with one or two other one-off events, which we'll discuss next. I think it's important to note that we think a lot of the drivers are hopefully behind us as the initial shock of COVID-19, which really came through in the second quarter of the year. As it has passed, markets have returned to a degree of normality. Actually, as we'll discuss, a lot of commodities in our portfolio fared very well through the COVID crisis. Turning to slide 14 and run through the numbers briefly. We'll go through some of the more technical aspects on an after-tax basis. I think overall, what was very pleasing in the first half of the year was that volumes were very steady from the portfolio.
As Julian mentioned, we experienced some very minor disruption at EVBC, which was only a two-week period, and McClean Lake has been placed on care and maintenance for what's probably going to be five months of this year. Elsewhere, the key royalties, which contribute to our revenue, remained fully operational at normal capacity. That's really testament to our strategy of investing in jurisdictions which really prioritize their mining industry and support their industry as a key economic activity. Kestrel and Narrabri suffered in the period due to the disruption in the coal market, largely as a result of the Indian port restrictions, which really basically took a key import market offline for basically the second quarter of the year.
With China self-sufficient in terms of supply and demand from a domestic perspective, that led a lot of product to be diverted onto the seaborne market, which basically resulted in producers being price takers. A very weak first half and second quarter in particular from Kestrel and Narrabri on pricing. Many commentators see the potential for coking coal in particular to outperform in the second half of the year. We're hopeful there will be a rebound in terms of pricing to come from Kestrel, and we're pretty optimistic on volumes as well. [audio distortion] this is a negative contributor to income. This is due to Anglo specifically being charged by the operator with its portion of the Glencore off-take agreement termination. As Julian said, whilst this has impacted our hedge book, there was a discount associated with that off-take arrangement.
Now that the sales function is back in-house, we would expect to see some higher margins coming through from this royalty going forward. Mantos was pretty steady during the year-to-date. We're pretty pleased with that. As I'm sure Juan will discuss, copper prices were weak in the second quarter, but actually have really rallied since. We see some upside to come from that in the period. For now, unfortunately, the legal process is still ongoing. Obviously, don't want to say too much about the case on this call. We still believe we have a very good case, and that both revenue and performance should have been higher, other than the level of charges and deductions that they continue to apply. Iron, the standout performer really in our portfolio and has kind of rivaled gold in terms of how it's performed as a commodity in the year-to-date.
It might be surprising to see revenue from iron not outperforming on our P&L. The reason for this is that there was some planned as well flagged CapEx expenditure being undertaken by the underlying operator, which reduced the level of dividends paid up to LIORC. We would expect, given the strength of the iron ore market at the moment, and the fact that that CapEx is now behind them, that there could be some upside to those numbers in the second half of the year. Elsewhere, the McClean Lake revenue, certainly in terms of the principal repayment portion of that revenue, was down. This reflects the care and maintenance of the operation throughout the second quarter of the year. EVBC again, similar to Labrador, you might expect that to be higher given gold price performance. There's been a working capital drag associated with the two-week shutdown.
There's been a slight lag between the resumption of their sales and receipt of cash, and it's upon receipt of cash that we receive the royalty. Overall, whilst it's disappointing to report a 43% downturn in revenue, it's largely due to increases and disruption in coal markets. We see a lot of potential for growth in the second half of the year, certainly in relation to price and volumes. Slide 15, which is our income statement. I won't dwell on this too much. I'll pick out a few things. Operating expenses at Mt. Isa North, H1 last year, probably slightly higher when you strip out share-based payments. This time made a provision for the remaining costs for the Four Mile project. We would expect it to be slightly less cost coming through in the second half of the year.
[audio distortion] Kestrel is accounted for to market, as is LIORC, but other intangibles are treated at amortized cost. When you go further down the balance sheet and take the deferred provision against the Kestrel headline number of GBP 75 million as Julian pointed out, LIORC is now our largest asset exposure on our balance sheet as at 30th of June. The first time a non-coal royalty has held that title.
Some other items just to flag the mining and exploration interest as at June, the GBP 5.5 million, that basically is our holding in Berkeley Energia, which has performed very well recently given the fact that it has obtained one of the two key outstanding permits left to commence construction. That portfolio is probably the upside of that versus the value I mentioned. Overall, our net debt did increase. We'll touch on that when we get to liquidity, but we're very comfortable.
Pardon the interruption, Kevin. There's some static coming from your line. Can we just double-check you have your PC muted?
Okay. Apologies, everyone. Hopefully, you can hear me a bit better. I was just about to turn to slide 17, which is my last slide before handing over to Juan. Just to touch on our cash and balance position and where we see this moving in the second half of the year in terms of availability to finance future growth. Despite revenue being down in the period, we still generated a significant amount of cash from our portfolio of GBP 21.9 million. Our cash flow in the first half of the year, the outgoing dividends and taxes are always weighted more to the first half of the year as we pay the balance of our previous year's tax in May or June of the calendar year. Obviously for dividends, the final dividend is at a much higher level or was a much higher level in 2019 versus the interim level.
Those two items are weighted heavier to the first half of the year. We would expect those to reduce in the second half and cash generation to pick up accordingly. We still have around about $59 million of undrawn banking facilities available to us, if you include the $30 million accordion, and these are available for growth opportunities. Whilst our borrowings number increased in the period, I think it's still very important to note that we still operate with a relatively low level of leverage around about 1 x as at June. We obviously have capacity to go to 2 x leverage. Whilst the level of borrowing number is larger, it's still very well covered by our earnings. Also to note, we did make GBP 5.7 million of investments, mainly into LIORC in the period, the reinvestment of dividends in the first half of the year.
I think just to summarize in terms of where we are from a financial position, I think we're still very strong balance sheet. We still have significant access to liquidity to proceed and enhance opportunities in the second half of the year. We see some tailwind behind some of the commodities that we have exposure to. We would be cautiously optimistic that the second half of the year will be better for us, given that some of the one-off events in the first half of the year are behind us and hopefully some normalization in the coal markets to come. With that, I hand over to Juan to discuss the portfolio.
Thanks, Kevin. Good morning, everyone. Over to slide 19. This very minute slide shows our current royalty portfolio. As Kevin and Julian have mentioned, the only COVID-related shutdowns we've experienced are the Denison and McClean Lake assets and the EVBC royalty, and both of these are considered non-material. During the COVID situation, we've been proactively keeping in contact with our counterparties on a more regular basis just in order to keep abreast where possible of any new developments. Turning the page to slide 20. Kestrel production continues without significant interruption from COVID. However, Adaro did revise its production guidance for 2020 down from 17.2 million tonnes to 6 million tonnes. Importantly, the Kestrel product remains a high demand product due to its coking characteristics and has contracted the majority of its 2020 production, mainly to Asian customers, including India, South Korea, and Japan. Over the page to slide 21.
We invested an additional 5.7 million tonnes in the first half, increasing our stake to 57%. Guidance from IOC on 2020 production is essentially unaffected by COVID-19 and remains at 17.9 million-20.4 million tonnes. As mentioned previously, IOC did announce the closure of two pellet plants out of six lines at the end of the first quarter of 2020. These have now been brought back online recently because of the improvement in the demand in the Atlantic pellet market. Mantos Blancos, again, no significant disruption due to COVID-19. The de-bottlenecking project for which we invested in and is for increasing throughput to 7.3 million tonnes, that continues to progress and is still due for completion in H2 next year. Once complete, the project is expected to produce an average of 52.4 kilotonnes of saleable copper per annum in the next 10 years of mine life.
Over the page on slide 22. Maracás Menchen, although there's been some logistical challenges, COVID seems to be really well managed on the relatively remote site, and there's been no significant impact on production. The project had a record level of sales in Q1 2020, which was great for our royalty, but also triggered the second and third consideration payment of GBP 1.5 million payable to the original owner of the royalty. The 2020 production guidance is unaffected by COVID and has remained unchanged at 11.75 to 12.25 kilotonnes of V2O5, and sales guidance remains at 9.5 to 10 kilotonnes of V2O5. The difference between production and sales is treated as finished product inventory because sales are now recognized at the time of delivery rather than at the mine gate. This can take several months from the time of shipment from the mine to the delivery to the end customer.
Due to the short-term COVID effects, such as things such as limiting access by the contractors, the planned upgrades have been put on hold for the short term, including kiln improvement, which would have had the effect of increasing nameplate capacity to 1,100 tonnes per month. This is now suspended until Q4 2020. At Narrabri, fiscal year 2020 longwall coal production was within the Whitehaven Coal guide for 60 to 60.5 million tonnes and slightly below fiscal year 2019 production, mainly because of a major longwall move that happened this year and upgrades to the leg cylinders in the longwall support. The sales guidance 2021 is 6.7 million tonnes, which is virtually in line with 2020 production. The next longwall move is during Q1 calendar year 2021.
Also, the Narrabri Stage 3 expansion program appears to be on track with EIS and engineering studies being advanced and further investigation of coal quality being undertaken. Transitioning to the next slide 23. As Kevin mentioned, Cigar Lake or McClean Lake Mill was placed on care and maintenance in March 2020 due to COVID and remains shut at present. However, Cameco has announced that it will restart operations at the beginning of September this year. New guidance for this year is 10.6 million pounds of uranium compared to the previous target of 18 million pounds of uranium, reflecting this period of shutdown. At EVBC, the operation was also affected by COVID, although it was only shut down for a period of two weeks, and importantly, this was because of a sector-wide enforcement by the Spanish authorities.
The production guidance for the fiscal year ending 30 September 2020 has been suspended by Orvana and is likely to fall short, mainly due to lower-grade ores being processed. At Salamanca, where we own an approximately 7% equity stake as well as the 1% NSR on all production from the project, there's been some very positive news there. Berkeley Energia announced that it has received the very long-awaited permanent license, which is issued by the local government municipal authority. This is really a great step in the permitting for the company. Now the only remaining license is for the authorization for construction license, which is issued by the Nuclear Safety Council.
Now turning the page to our development assets, which offer us significant upside. Following our investment at the beginning of the year, construction on the Incoa Calcium Carbonate project continues, with latest reports being that construction is on time and on budget, and commissioning is due in 2021. We've also had several very positive news stories on some of our other development assets during the half.
At Cañariaco, Candente announced that iron ore major Fortescue Metals had taken a near 20% stake in the company and has allocated two engineers to work on a joint technical committee to help identify the optimum strategies for development of the project. On the Dugbe gold project in Liberia, Hummingbird Resources has entered into an agreement with ARX, whereby ARX will undertake a feasibility study on the project in return for a 49% interest. These are all very positive developments for us. Now I'll hand back over to Julian to wrap up.
Thank you, Juan. Yes, I think those positive developments do bode well for the medium-term growth in our royalty income, and we've been very encouraged by these developments, particularly in Q2. Wrapping up with the outlook, we do expect stronger results in the second half of the year across much of the portfolio. As I said, Kestrel should benefit from the recent stabilization and slow growth in coking coal prices, and the fact that the Indian market has been reopened effectively to coking coal imports. Labrador Iron Ore will benefit from the very strong current iron ore prices, as demand fundamentals remain strong. The one-off charge from Maracás mentioned in Q2 is not going to be repeated thereafter. We expect enhanced margins from the conclusion of the Glencore off-take agreement to assist us going forward.
The copper price is helpful for Mantos copper and when the Denison financing agreement kicks in again from September, that will be an additional source of income. We face the second half with optimism, and we do have substantial undrawn borrowings available, as Kevin mentioned, to finance further growth in H2, and we are seeing some interesting opportunities. It's been frustrating we haven't executed on them, but we continue to expect to be able to do one or two transactions in the second half. With that, I'll hand back to the operator to arrange the Q&A session and look forward to your questions. Thank you.
Thank you, sir. If you would like to ask a question on today's call, please signal now by pressing star one on your telephone keypad. That's star one to ask a question. We will pause for one moment to allow everyone to signal. Again, that's star one. We have a question in the queue from Richard Hatch from Berenberg. Please go ahead.
Thanks very much. Good morning, Julian and team. Thanks very much for the call and congrats on that solid set of numbers in a difficult environment. Got three questions. First one is just on Kestrel. Wonder if you can just remind us what kind of discount the Kestrel metallurgical end product takes into the market and where that sort of discount ranges in various parts of the cycle for the coal market, what you're seeing at the moment and where you believe that's going. Second, just on the dividend. You point out about flexibility on the balance sheet, but I was just wondering, Kevin, if you might just be able to expand a little bit more about how you're considering the dividend cover, just in a range of scenarios for the coal price.
For example, if we see met coal stay softer for longer, how does that sort of shape your thinking? I suppose that kind of feeds into my third question, which is just on the deal pipeline. Julian, you talked to the hope that you might be able to put a couple of deals on the table. Would you be able just to give a bit of clarity over perhaps either the size or even the portfolio contribution that those deals could add in terms of when the meaningful contribution might come, whether it's in the near term or longer term, and again, how that sort of shapes your thoughts on the dividend and capitalization? Thanks.
Sure. Well, taking the first question about Kestrel, I think what we were seeing before COVID was that as Kestrel was ramping up production, they were needing to attract new customers and were providing a larger discount to the benchmark pricing of the product in order to gain market share. With the developments in Q2 in India, they then had to divert some of that material to China, where again, there was an oversupplied market and they accepted larger discounts, and those discounts were up to 20%. You would expect as the market tightens, and we understand that they've sold half their production for the remainder of the year, that those discounts would narrow somewhat. We don't have complete clarity as to what those narrowed discounts would be. I'll hand over to Kevin to discuss the dividend question. Kevin?
Thanks, Julian. Yeah, thanks for the question. I think dividend levels is always something we look at. We like to have a healthy level of dividend cover. Look, we've been through some very unique events in the first half of the year. I think whilst we expect some normality to return to the coal markets, which will be key for us in the second half of the year, I think it would be very premature to make a dividend decision or alteration at this point based on really unprecedented disruption into the coal markets for what's hopefully an isolated period of time.
Again, I think we like and we aim to have two times dividend cover. We may not achieve that this year, depending on how quickly the coal markets reopen and rebound. Again, I think it's too premature to think about dividend levels, especially if some normality returns to those markets.
Richard, with regards to the question about potential deals, we continue to look particularly at areas which are interesting and out of favor. We're looking at cobalt, we're looking at lithium. There are some more copper opportunities. We're looking at potassium phosphate. There are a variety of transactions of different sizes. None of them have really fallen away over the last quarter. Some have been delayed. I think many companies are making decisions more slowly in the current environment. The aim is very much to reposition Anglo Pacific away from the coal heritage towards being the royalty company for 21st century materials. I think we're well on the road to achieving that.
The focus continues to be on producing royalties. There are a number of those which are in the pipeline. We'll just have to see which ones of those, in fact, we can bring to fruition. How we finance those will be decided at that time.
Very helpful. Thanks a lot for your time.
As a reminder, if you would like to ask a question, please press star one. As a final reminder, if you would like to ask a question, please press star one. There are no further questions on the line at this time. I would now like to turn the call back to the host for any additional or closing remarks.
Well, thank you very much for all of your interest. You know how to get hold of us if you have any further questions. I'm glad we got through this more difficult second quarter. As I said, we look forward to the remainder of the year with optimism. We're positive about the prices recovering as expected. There's positive developments in the development portfolio, bode well for the medium term, and we will continue to execute and diversify the portfolio. Do reach out to us if you have any further queries. Many thanks for your time.