Tribeca Global Natural Resources Ltd. · ASX:TGF
Tribeca Global Natural Resources — Investor Presentation (March 2020)
32 slides from Tribeca Global Natural Resources's investor presentation, Mar 2, 2020
Slide 1: ASX Market Announcement: Investor Update Presentation
2 March 2020 For personal use only ASX Market Announcements ASX Limited 20 Bridge Street Sydney NSW 2000 BY ELECTRONIC LODGEMENT Investor Update Presentation Please find attached Investor Update Presentation. For any enquiries please contact TGF at TGFinvestors@tribecaip.com.au or by calling +61 2 9
Slide 2: Buying Straw Hats in Winter
For personal use only Tribeca Global Natural Resources Ltd (ASX:TGF) “Buying Straw Hats in Winter” Ben Cleary, Portfolio Manager March 2020
Slide 3: Legal Disclaimer
Legal Disclaimer This presentation has been prepared for Tribeca Global Natural Resources Limited (ABN 16 627 596 418) (“TGF”) by its investment manager, Tribeca Global Resources Pty Ltd (ABN 11 606 707 662) (“Tribeca”) under AFS License 239070 (Tribeca Investment Partners Pty Ltd). The information
Slide 4: Agenda
Agenda For personal use only 1. Performance Update 2. Addressing Discount to NTA 3. Covid-19 Impact 4. View from Miami 5. Core Positions 6. Investment Team and Board 3
Slide 5: TGF NTA vs Share Price Performance
TGF NTA vs Share Price Performance For personal use only Key Details (as at 31 Jan 2020) Monthly NTA Monthly Performance Since Listing ASX Code TGF Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD Listing Share Price $2.50 -0.07% -0.36% -0.71% -1.14% 0.16% -0.44% -0.16% 0.25% -3.24% 0.78% -0.52%
Slide 6: Sector Attribution
Sector Attribution For personal use only 2018 2019 2020 YTD Uranium Uranium Uranium Soft Commodities Soft Commodities Soft Commodities Services Services Services Precious Metals Precious Metals Oil & Gas Oil & Gas Oil & Gas Dual Listed Companies Dual Listed Companies Dual Listed Companies Diversifed
Slide 7: Current Portfolio Exposures
Current Portfolio Exposures For personal use only Current Net Exposures by Sector Long and Short Exposures (inc Credit) 120% Uranium 100% Long (%) Short (%) 80% Soft Commodities 60% 40% Services 20% 0% Precious Metals -20% O-18 N-18 D-18 J-19 F-19 M-19 A-19 M-19 J-19 J-19 A-19 S-19 O-19 N-19 D-19 J-
Slide 8: Value-on-Value
“Value-on-Value” For personal use only TGF discount to NTA offers shareholders exposures to sectors that are already trading at significant discounts. Sector Metric Overlay with TGF Discount to NTA (20%) Australian Gold Basket A$2,500/oz A$3,000/oz North American Base Metal 6x EV/EBITDA <5x EV/EBITD
Slide 9: Addressing the Discount to NTA
For personal use only Addressing the Discount to NTA
Slide 10: Addressing the Discount to NTA
Addressing the Discount to NTA For personal use only • On 26 February 2020, the TGF Board announced the On-Market Share Buy-Back of up to 10% of outstanding shares. • Expected to commence from 12 March 2020 and remain in place for up to 12 months. • Specifically designed to address the material disc
Slide 11: COVID-19 Impact
For personal use only COVID-19 Impact
Slide 12: Unprecedented Sell-Off
Unprecedented Sell-Off S&P Futures Moves Since 21st January For personal use only Nowhere to Hide: Defensives Underperform (S&P Sectors - 28 Feb, 2020) Retail call-buying of Momentum stalls 3500 Covid19 MoMo/Tech/growth + Apple profit Consumer Staples outbreak in creates gamma warning China 3400 Uti
Slide 13: Covid-19 Impact on Commodities
Covid-19 Impact on Commodities • After recovering around a third of the January Covid-19 losses over the first three weeks of February, commodities For personal use only were sold off aggressively in the last week of February as cases of infection outside China began to escalate. • Oil Prices are do
Slide 14: February Economic Output Was Very Weak
February Economic Output Was Very Weak For personal use only Commodity Price Performance Year to Date Chinese Manufacturing Sector Has Not Recovered Yet Met Coal 13% Coal Burnt at 6 Major Chinese Power Plants Gold 8% 350 Alumina 4% Silver -1% 300 mtpa (10 Day MA) Thermal -2% 2020 2019 Lead -3% 250 2
Slide 15: Inventory Building and Production Lower
Inventory Building and Production Lower For personal use only Upstream Coking Coal Inventories Are Dropping at Mines & Coke Iron Ore Port Stocks Are Yet to Meaningfully Increase Plants 170 Iron Ore Port Stocks Upstream Coking Coal Inventories 10.0 160 9.0 150 8.0 140 mt mt 130 7.0 120 6.0 2020 2019
Slide 16: Positioning Washout in Commodities Has Occurred, Especially for Crude
Positioning Washout in Commodities Has Occurred, Especially for Crude For personal use only Managed Money Net Positioning Changes Since Corona Crude, Gas, Copper Net Short Positioning is Below 2015 Levels 2.50 2.5 Long 2 2.00 1.5 1.50 1 1.00 18-Feb 14-Jan 0.5 0.50 0 0.00 -0.5 -0.50 -1 -1.00 -1.5 -1.
Slide 17: The View from Miami
For personal use only The View from Miami
Slide 18: The View from Miami
The View from Miami For personal use only Four of the investment team visited portfolio companies, conducted site visits and attended key industry conferences in North America in late February. Global Metals & Mining Conference Global Chemicals Conference Global High Yield Conference 17
Slide 19: Key Takeaways
Key Takeaways For personal use only • Covid-19 remains the elephant in the room and while most producers indicated no direct impact on their sales as of yet, many did flag raw material supply chain challenges for items sourced from China. • Environmental, Social and Governance (ESG) concerns, partic
Slide 20: Core Positions and Themes
For personal use only Core Positions and Themes
Slide 21: Paringa Resources Ltd (~15% Weight)
Paringa Resources Ltd (~15% Weight) For personal use only Barging Operations at Paringa’s Ainsworth Completion of Stop (Decline) Construction Dock Loan Overview • TGF is a lender in the US$40m senior secured debt facility Operational Update • Coal quality and specification continues to meet customer
Slide 22: Warrior Met Coal (~6% Weight)
Warrior Met Coal (~6% Weight) For personal use only Free Cashflow to Grow on Flat Pricing and New Production Free Cashflow Yield is Approaching 80% with Limited Net Debt • Premium hard coking coal with strong recent history of capital returns • Currently trading on a free cashflow yield of >40% the
Slide 23: Shipping Basket (~12% Weight)
Shipping Basket (~12% Weight) For personal use only How Shipping Stocks Are Valued Through the Cycle Fleet Valuation Earnings & Cash Flow • P/NAV • P/E • EV/Fleet CURRENT POINT • EV/EBITDA Distributions Value IN THE CYCLE • P/FCF • Dividend Yield Where Are We Now? CYCLE • Sector has been sold off ag
Slide 24: Australian East Coast Gas Basket (~6% Weight)
Australian East Coast Gas Basket (~6% Weight) For personal use only Forecast of S.E. Australian Gas Production, Demand and Supply Australian East Coast Gas Crisis Only Worsening: Bass Strait Production to halve in 10yrs • 30% of the East Coast supply set to halve over 10yrs - BHP is pulling back inv
Slide 25: Cooper Energy (~3% Weight)
Cooper Energy (~3% Weight) For personal use only Growing Proportion of Uncontracted Gas into Tightening East Coast Market • Cooper Energy set to ramp up supply to east coast market with Sole - Upside with Sole production via Orbost debottleneck • Potential upside from exploration and development - S
Slide 26: Freeport McMoRan (~8% Weight)
Freeport McMoRan (~8% Weight) For personal use only Freeport’s EBITDA Expected to Double Over Next 2 Years 8,000 7,000 6,000 5,000 • Largest listed copper producer globally trading at depressed levels in terms of EV per pound of reserves. ($milionl) • EBITDA should double over the next 2 years (2021
Slide 27: Lundin Mining (~5% Weight)
Lundin Mining (~5% Weight) For personal use only Copper, Gold Production & Cash Cost Outlook 100% basis; kt Cu. Koz Au & $/lb Cu, net of by-product credits 185-195 Avg. +190 Copper Gold 165-175 146 • Exposure to Tier1 portfolio of copper, zinc, nickel and gold, with copper 110-115 Avg. +110 the domi
Slide 28: Gold Basket (~11% Weight)
Gold Basket (~11% Weight) Countries with Negative Real Interest Rates (%) For personal use only Vietnam (3.56) Canada (1.24) China (2.67) India (1.22) Germany (2.32) Switzerland (1.05) Netherlands (1.92) Australia (0.98) Structural Tailwinds for Gold in All Currencies France (1.71) Japan (0.85) Irel
Slide 29: Uranium (~12% Weight)
Uranium: (~12% Weight) For personal use only Historical Uranium Price US$/lb Fundamentals are structurally bullish 160 2007: Uranium price hits US$140/lb • 2019 supply and demand deficit was significant and 140 should represent the bottom for the industry 120 • There were140 million pounds of uraniu
Slide 30: Investment Team and Board
For personal use only Investment Team and Board
Slide 31: Tribeca Global Natural Resources Team
Tribeca Global Natural Resources Team For personal use only Investment Team Operations and Finance Ben Cleary Haydn Smith Guy Keller James Howes Kylie Osgood Ken Liu Portfolio Manager Head of Credit Head of Commodity Trading Chief Operating Officer Chief Financial Officer Compliance Manager Margot B
Slide 32: Board of Directors
Who / What we are Board of Directors For personal use only Bruce has extensive experience in the financial services industry both in Australia Ben has had an extensive career in the natural resources sector having worked in a and overseas. He has been CEO of several funds management businesses in nu
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