Pinetree Capital Ltd. · TSX:PNP
Pinetree Capital — Investor Presentation (November 2006)
33 slides from Pinetree Capital's investor presentation, November 2006
Slide 1: Pinetree Capital Ltd.
Pinetree Capital Ltd. November 2006 Venture To Grow®
Slide 2: Forward Looking Statements
Forward Looking Statements Certain statements contained in this Presentation, the short form prospectus, and in certain documents incorporated by reference into the short form prospectus includes and is based on, inter alia, forward-looking information that are subject to risks and uncertainties. Al
Slide 3: Pinetree: A Specialized Investment Company
Pinetree: A Specialized Investment Company A publicly-traded company that invests primarily in the natural resources sector • Small cap. focus • Targets investments in emerging growth companies A proven track record of outperformance • Deep industry relationships • Superior access to information
Slide 4: Proven Track Record of Outperformance
Proven Track Record of Outperformance NAV per share up 318% since September 2002 Share price up 54x from September 2002 to October 2006 Pinetree NAV(1)/Share and Share Price $15.00 $15.00 NAV/share $14.22 PNP Share Price $12.00 $12.00 $8.95 $8.80 $8.65 $9.00 $9.00 NAV/share Share Price $6.27 $6.
Slide 5: Proven Track Record of Outperformance
Proven Track Record of Outperformance Pinetree has significantly outperformed all relevant benchmarks, whether compared to the broader market or specific sectors – returns > 3x that of nearest benchmark for YTD and 1 Year Returns YTD Returns -Annualized 1 Year Returns 120.0% 120.0% 112.5% 100.0% 9
Slide 6: Proven Track Record of Outperformance
Proven Track Record of Outperformance Pinetree continues to significantly outperform over a longer investment horizon – returns exceed closest benchmark by ~8% annually 3 Year Returns -Annualized 5 Year Returns – Annualized 45.0% 35.0% 31.7% 39.5% 40.0% 30.0% 35.0% 31.4% 24.3% 25.0% 30.0% 25.0% 20
Slide 7: Proven Track Record of Outperformance
Proven Track Record of Outperformance Every $1 invested in Pinetree in 2001 or 2002 would be worth over $30 today – even those that invested at the end of 2005 would have over $5 for every $1 invested Current Value of $1 Invested in Pinetree Over Each of Past 5 Years $40.00 $36.48 $35.00 $30.40 $3
Slide 8: Portfolio by Sector (September 30, 2006)
Portfolio by Sector (September 30, 2006) Investments are currently primarily in three sectors: • Precious Metals, Uranium, Oil & Gas Portfolio Sector Breakout Key Investments (Percentages are of Total Portfolio Fair Value) Precious Metals Aurelian Resources Biotechnology Guyana Goldfields Base
Slide 9: Unique Investment Approach to Small Cap. Universe
Unique Investment Approach to Small Cap. Universe Investment approach: Develop a Macro Find the micro-cap Build Target Manage Exit Understanding of a opportunities in Company Position Strategy Sector target sector over time We bring a unique approach to public investing: • Flexibility to invest
Slide 10: Pinetree – Ahead of the Cycle (Gold)
Pinetree – Ahead of the Cycle Pinetree began investing into precious metals stocks in late 2002 – when gold was at the $300/oz level – today gold is trading at ~$620/oz • Opportunistic increases in the precious metals sector have led to outperformance Spot Gold Price vs. Pinetree Investments $750
Slide 11: Pinetree – Ahead of the Cycle (Uranium)
Pinetree – Ahead of the Cycle Pinetree has developed a positive view on uranium based on macro factors Pinetree began to increase its portfolio weighting in uranium in December 2004, well ahead of run-up in uranium price Spot Uranium Price vs. Pinetree Investments $70.00 Key Stocks Increases Ura
Slide 12: Pinetree – Ahead of the Cycle (Oil)
Pinetree – Ahead of the Cycle Pinetree invests in oil & gas when oil trades at ~$30/barrel and maintains 10% portfolio weighting as oil soars • Takes advantage of temporary market weakness and increases portfolio weighting to over 20% in Q1 2005and maintains weighting as oil soars to over $70/barr
Slide 13: Sample Successes – Gold
Sample Successes – Gold Aurelian Resources Inc. (ARU:TSXV) Aurelian Resources Inc. $45.00 Investment Summary $40.00 Initial investment of $450,000 in late 2003 $35.00 Pinetree Invested an additional $2.5 million since $30.00 Invests Closed at $29.75 on Sept. 29, 2006 $25.00 $20.00 Total valu
Slide 14: Sample Successes – Gold
Sample Successes – Gold Guyana Goldfields Inc. (GUY:TSX) Guyana Goldfields Inc. $12.00 Investment Summary $10.00 Initial investment of $150,000 in June 2002 Additional investment of $7.8 million since Pinetree $8.00 Invests Closed at $8.85 on Sept. 29, 2006 $6.00 Total value to Pinetree at S
Slide 15: Sample Successes – Uranium
Sample Successes – Uranium Mega Uranium Ltd. (MGA:TSX) Mega Uranium $5.00 Investment Summary $4.50 Total cost to Pinetree of $22.8 million $4.00 Total value to Pinetree at Sept. 29, 2006: $20.6 million (0.9x cost) $3.50 $3.00 Helped build Mega into a $550 million market cap. company $2.50 $2.0
Slide 16: Sample Successes – Oil & Gas
Sample Successes – Oil & Gas Petrolifera Petroleum Ltd. (PDP:TSX) Petrolifera Petroleum Ltd. $25.00 Investment Summary Initial investment of $900,000 in late 2005 $20.00 Pinetree Added $6.2 million in 2006 Invests $15.00 Closed at $20.90 on Sept. 29, 2006 Total value to Pinetree at Sept. 29,
Slide 17: Sample Successes – Oil & Gas
Sample Successes – Oil & Gas Oilsands Quest Inc. (BQI:AMEX) Oilsands Quest Inc. $8.00 Investment Summary $7.00 Initial investment of US$85,000 Pinetree $6.00 Closed at US$5.66 on Sept. 29, 2006 Invests $5.00 Total value to Pinetree at Sept. 29, 2006 - C$14.2 million (3.8x cost) $4.00 $3.00 $2.
Slide 18: Sample Successes – Other
Sample Successes – Other BASE METALS FNX Mining $18.00 FNX Mining Co Inc. (FNX:TSX) Pinetree $15.00 Invests Investment Summary $12.00 Initial investment of $350,000 in mid-2001 Additional investment of $20.4 million since initial investment $9.00 Closed at $12.50 on Sept. 29, 2006 $6.00 Tota
Slide 19: Sheldon Inwentash
Sheldon Inwentash 25 year investing background from technology to resources Extensive network of contacts who provide investment opportunities and due diligence assistance Track record of investing ahead of the market Reputation for “fair” deals and quick response Demonstrated expertise in
Slide 20: Sheldon – Known For Backing the Winners
Sheldon – Known For Backing the Winners Demonstrated expertise building portfolio companies 39.5% Annualized Return Past 3 years Maximise value/ Returns for shareholders Build Investments over time Due diligence yields target portfolio Invest in investments Sector ahead of market Venture To Grow®
Slide 21: Access to Deal Flow - Diversified Business Model
Access to Deal Flow - Diversified Business Model Two inter-related and integrated parts to our business: 1. We are diversified investors of our own capital 2. Through PowerOne Capital Markets Limited, which is 50% owned by Pinetree: We act as agents to raise capital for small cap companies We pr
Slide 22: Management Interests Aligned with Shareholders
Management Interests Aligned with Shareholders Significant direct equity ownership ~ 23% basic; 28% fully diluted • Of insiders’ 23% interest, Sheldon Inwentash currently owns 21%(1) of shares outstanding Ownership Management & Family / Other Insiders 23% Public 77% (1) Sheldon Inwentash and spous
Slide 23: Management Interests Aligned with Pinetree
Management Interests Aligned with Pinetree Management owns approximately 30% of Pinetree • Management’s holding represents a significant portion of management’s wealth – closely aligned interests with Pinetree shareholders Pinetree’s Board and Management always ensure their fiduciary duties to P
Slide 24: Investment Highlights
Investment Highlights • Track record of investing into sectors in advance of market Proven Track Record of • Beating all benchmarks Outperformance Unique Investment Approach Management Interests to Small Cap. Universe Aligned with Shareholders • Demonstrated expertise advising portfolio companies Ac
Slide 25: Summary of the Offering
Summary of the Offering Securities Offered: Units consisting of 1 Common Share + ½ Warrant Each full warrant allows holder to purchase 1 Common Share for 5 years from Closing – exercise price to be priced in the context of the market Offering Size: Approximately $30 million Pricing: In the c
Slide 26: Appendices
Appendices Appendices Venture To Grow®
Slide 27: Market Overview (as at Nov 16, 2006)
Market Overview (as at Nov 16, 2006) Current Market Overview(1) Weekly Share Price (Last Two Years) Symbol (TSX) PNP $18.00 Current Share Price (1) $15.96 $16.00 Shares Outstanding (MM) 43.43 $14.00 Options Outstanding (MM) 2.88 $12.00 Broker Warrants (MM) 0.08 $10.00 Market Capitalization (MM) – Ba
Slide 28: Balance Sheet Summary (as at Sept. 30/06)
Balance Sheet Summary (as at Sept. 30/06) Assets ($ Millions) Investments at fair value 420.7 Other assets .9 Total Assets $421.6 Liabilities Due to brokers 72.6 Accounts payable and accrued liabilities 6.1 Advances from affiliated company 0.1 Deferred revenue 0.1 Income taxes payable 4.2 Total Curr
Slide 29: Management Team
Management Team Sheldon Inwentash – Chairman and CEO C.A., over 25 years investing (resource, tech, biotech) experience Pat DiCapo – Managing Director, PowerOne Capital Markets Limited Lawyer, focus on capital raising, financing structures, advisory services Larry Goldberg – Executive Vice Presi
Slide 30: A Brief History
A Brief History Pinetree founded by Sheldon Inwentash as a venture investor in early stage, emerging 1992 technology companies – initial capitalization of $4 million Genevest Inc. founded by Sheldon Inwentash as a venture investor in early stage, 1994 emerging biotechnology companies – initial capit
Slide 31: Organizational Structure
Organizational Structure Pinetree Capital Ltd. 50% 100% CAPITAL RAISING NON-RESOURCE OFFSHORE FINANCIAL ADVISORY RESOURCE INVESTMENTS INVESTMENTS SERVICES INVESTMENTS Pinetree (Barbados) Inc. PowerOne Capital Markets Ltd. Energy Related Uranium Technology Biotechnology Oil & Gas Other Technology Pre
Slide 32: Overview of Accounting Policies
Overview of Accounting Policies At each reporting period management estimates the fair value of investments based on the criteria below: Publicly Held Securities • Publicly traded investments – Quoted market price • Restricted securities (i.e. hold period) – Applicable discount applied • In-the-
Slide 33: Prudent Leverage
PRUDENT LEVERAGE Our Returns Have Been Generated While Employing Consistent Levels of Leverage Leverage as a % of Fair Value of Investments 35% 30% 29% 28% 27% 27% 26% 25% 25% 24% 24% 20% 17% 15% 15% 12% 10% 5% 0% Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05 Sep-05 Dec-05 Mar-06 Jun-06 Sep-06 Venture T
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