Tribeca Global Natural Resources Ltd. · ASX:TGF
Tribeca Global Natural Resources — Investor Presentation (September 2020)
41 slides from Tribeca Global Natural Resources's investor presentation, Sep 1, 2020
Slide 1: Investor Update Presentation – Gold Focus Report
1 September 2020 For personal use only ASX Market Announcements ASX Limited 20 Bridge Street Sydney NSW 2000 BY ELECTRONIC LODGEMENT Investor Update Presentation – Gold Focus Report Please find attached Investor Update Presentation – Gold Focus Report. The information contained in this document has
Slide 2: Tribeca Global Natural Resources Gold Focus Report
For personal use only Tribeca Global Natural Resources Gold Focus Report Todd Warren, Head of Research Michael Orphanides, Precious Metals Analyst August 2020
Slide 3: Disclaimer
This presentation has been prepared for Tribeca Global Natural Resources Limited (ABN 16 627 596 418) (“TGF”) by its investment Disclaimer manager, Tribeca Global Resources Pty Ltd (ABN 11 606 707 662) (“Tribeca”) under AFS License 239070 (Tribeca Investment Partners Pty Ltd). The information contai
Slide 4: Overview
Overview For personal use only 1. Macro Outlook for Gold 2. Investor Positioning 3. The Need for Portfolio Construction 4. Tribeca’s Investment Process and Case Studies
Slide 5: Presenter Profiles
Presenter Profiles For personal use only Todd has over 20 years of capital markets experience including 16 years covering all aspects of the energy and mining sectors. Prior to joining Tribeca, Todd spent 22 years with Colonial First State Global Asset Management (CFSGAM), including six years based
Slide 6: Macro Outlook for Gold
For personal use only Macro Outlook for Gold 5
Slide 7: The Case for Precious Metals
The Case for Precious Metals For personal use only • Tribeca Global Natural Resources’ (GNR) exposure to precious metals has materially increased from March this year following the unprecedented and co-ordinated global monetary stimulus to combat the impact of Covid-19. • The gold price has recently
Slide 8: Extraordinary Central Bank Stimulus Has Eased Financial Stresses
Extraordinary Central Bank Stimulus Has Eased Financial Stresses For personal use only 6 Fed ECB BoJ EM Other DM 5 4 Total Purchases ($t) 3 2 1 0 -1 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Source: Bloomberg 7 9
Slide 9: Increased Money Supply Has Historically Been Very Supportive for Commodities
Increased Money Supply Has Historically Been Very Supportive for Commodities For personal use only US RECESSIONS AS DEFINED BY THE NBER CRB SPDT INDEX (Y/Y%, LS) US M2/INDUSTRIAL PRODUCTION (Y/Y%, ADVANCED, RS) 60 40 40 30 20 20 0 10 -20 0 -40 -10 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20
Slide 10: Comparing QE Periods
Comparing QE Periods For personal use only Commodity prices rallied for more than 2 years after the first QE from 1Q2009 to 1Q2011 Commodity Peaked Time Performance Since QE Silver Late April, 2011 +369% Nickel Late February, 2011 +181% Copper Mid February, 2011 +181% Gold Late August, 2011 +131% Co
Slide 11: Comparing QE Periods
Comparing QE Periods For personal use only • Commodity prices have begun to rally from the March 2020 lows when current QE was announced. • Relative to 2009-2011 there would be material upside from here Commodity Performance Since QE Silver +71% Nickel +21% Copper +37% Gold +20% Coal -21% Aluminum +
Slide 12: Inflation Expectations Have Driven Real Rates Lower
Inflation Expectations Have Driven Real Rates Lower For personal use only USD Treasury Real and Nominal Yield, and Breakeven Inflation Recent Rise In Inflation Expectations Due to Structural, 3.5 0 Rather Than Cyclical Repricing Of Inflation 1.6 3 1.4 -0.5 2.5 Rising breakevens are driving real rate
Slide 13: Lower Real Rates and USD Positive for Commodities
Lower Real Rates and USD Positive for Commodities For personal use only USD vs Industrial Metals Performance US Real Yields vs USD 122.5 -1,160 1320 0.80 120 -1,170 -1,180 1300 0.60 117.5 115 -1,190 0.40 -1,200 1280 112.5 -1,210 0.20 110 -1,220 1260 107.5 0.00 -1,230 105 1240 -1,240 102.5 -0.20 -1,2
Slide 14: G3 Central Bank Balance Sheets 8x vs Gold 6x
G3 Central Bank Balance Sheets 8x vs Gold 6x Over Past 20 years For personal use only 1,000 900 .AEJCBBS G Index 814.2122 GOLDS Comdty 628.8828 800 700 600 Last Price ($) 500 400 300 200 100 0 Sources: SAV Markets, Bloomberg 13 27
Slide 15: Gold Has Hit a Record Against a Basket of World Currencies
Gold Has Hit a Record Against a Basket of World Currencies For personal use only Challenging the Paper Tigers – Bullion’s At A Record Against A Basket Of World’s Top Currencies 1.2 1.0 0.8 0.6 0.4 Gold equally weighted against USD,EUR,JPY,CNY 0.2 0.0 Sources: SAV Markets, Bloomberg 14 28
Slide 16: Arguably Still in the Early Stages Relative to Prior Cycles
Arguably Still in the Early Stages Relative to Prior Cycles For personal use only BGMI Bull Markets Since 1942 800 10/1942-02/1946 07/1960-03/1968 12/1971-08/1974 08/1976-10/1980 700 11/2000-03/2008 10/2008-04/2011 01/2016-02/2020 600 500 400 300 200 Current Bull Market 100 0 1 41 81 121 161 201 241
Slide 17: Gold Equities Valuation Not in Bull Market Territory
Gold Equities Valuation Not in Bull Market Territory For personal use only Enterprise Value per Ounce of Resource Divided by Historical P/NAV – Universe of Coverage Average Gold Price – North American Gold Developers 0.12 2.30 Bull Market 2.10 (mid-2019) 0.10 EV per Oz of Resource/Gold Price 1.90 0.
Slide 18: Investor Positioning
For personal use only Investor Positioning 17
Slide 19: Investor Positioning: Precious and Base Metals
Investor Positioning: Precious and Base Metals For personal use only Gold 4.0 Silver 2.0 3.0 1.0 2.0 0.0 1.0 -1.0 0.0 -1.0 -2.0 -2.0 -3.0 -3.0 -4.0 -4.0 2015 2016 2017 2018 2019 2020 2015 2016 2017 2018 2019 2020 Net long positions in Gold (Z-score) Net long positions in Silver (Z-score) Copper Nick
Slide 20: ETF Inflows Have Been Strong with Weak EM Demand Which Should Improve
ETF Inflows Have Been Strong with Weak EM Demand Which Should Improve For personal use only Sharpest Gold ETFs Inflows Since The Financial Crisis EM Demand Will Help Drive Gold Prices Higher Despite Being 35% 70% 4,000 -3 Crowded Out 30% 60% EM Nominal $ GDP Growth 3,500 -2 Goldman Sachs Forecast 50
Slide 21: Private Client Precious Metals ETF Holdings Have Risen
Private Client Precious Metals ETF Holdings Have Risen But Material Upside To 2011-2012 Levels For personal use only Private Client Precious Metal ETF Holdings as % of ETF AUM 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Sources: BofA Global Investment St
Slide 22: Berkshire Hathaway's New Exposure to Gold
Berkshire Hathaway’s New Exposure to Gold For personal use only $565m • 14 August 2020: Berkshire Hathaway Inc. bought 1.2% of Barrick Gold Corp’s outstanding stock at a market value of US$565m, representing only 0.5% of it's listed equity portfolio • Warren Buffet’s first investment in gold; he pre
Slide 23: The Need for Active Management & Dynamic Portfolio Construction
For personal use only The Need for Active Management & Dynamic Portfolio Construction 22
Slide 24: Large vs Small Caps At Different Times In The Cycle
Large vs Kirkland Small Caps At Different Times In The Cycle Lake For personal use only 80 60 40 20 Last Price ($) 0 -20 -40 -60 -80 GDX US Equity GDXJ US Equity Source: Bloomberg 23 20
Slide 25: ETFs Do Not Work
Kirkland LakeDo Not Work ETFs For personal use only Gold Price vs GDX 200 180 160 140 Last Price ($) 120 100 80 60 40 20 0 GDX US Equity XAU Currency Source: Bloomberg 24 20
Slide 26: Significant Alpha Available From Fundamental Analysis
Significant Kirkland Lake Alpha Available From Fundamental Analysis For personal use only 2,000 1,800 1,600 1,400 1,200 Last Price ($) 1,000 800 600 400 200 0 Jan 2015 Jul 2015 Jan 2016 Jul 2016 Jan 2017 Jul 2017 Jan 2018 Jul 2018 Jan 2019 Jul 2019 Jan 2020 Jul 2020 .MAGIC5 U Index AS30XGD Index XAU
Slide 27: Tribeca's Current Portfolio Construction
Tribeca’s Current Portfolio Construction For personal use only • Portfolio construction consists of mix of majors (~35%), mid-cap quality (~25%), mid-cap value (~25%) and exploration (~15%) • Spread across North America and Asia Pacific • Multiples are still well below prior bull market levels and h
Slide 28: Tribeca Global Natural Resources Investment Process and Position Case Studies
For personal use only Tribeca Global Natural Resources Investment Process and Position Case Studies
Slide 29: Investment Process: Producers
Investment Process: Producers For personal use only Key Areas of Focus When Analyzing Commodity Producers FIXED Only Assets Cannot be Changed ✓ Ownership can change GOAL ✖ Attributes cannot change Social License Assets Invest in the best assets operated by the best management, with the strongest fin
Slide 30: Kirkland Lake Gold – Assets
Kirkland Kirkland Lake Gold Lake For personal use only Assets • Diversified portfolio with three key operating top tier jurisdictions in Social License Assets Australia and Canada. Management Financial • Good sized assets and low cost, especially Fosterville, their mine in Strength Australia which i
Slide 31: Kirkland Lake Gold – Financial Strength
Kirkland Kirkland Lake Lake Gold For personal use only Financial • Very high margins that are better than most gold peers given the very low Social License Assets Strength costs of their Australian asset Fosterville. Financial • Has one of the best balance sheets in the gold business with over Manag
Slide 32: Kirkland Lake Gold – Valuation
Kirkland Kirkland Lake Lake Gold For personal use only Social License Assets Valuation • At the time of purchase earlier this year, Kirkland was trading on a low EV/EBITDA multiple versus peers and Financial Management Strength only a small premium to NAV. Valuation • Based on consensus data today,
Slide 33: Kirkland Lake Gold – Management
Kirkland Kirkland Lake Lake Gold For personal use only Social License Assets Management • One of the strengths of Kirkland Lake is its management • CEO is a miner at heart who knows how to operate mines Management Financial Strength • Willingness to invest in exploration to grow the assets • Demonst
Slide 34: Kirkland Lake Gold – Social License
Kirkland Kirkland Lake Lake Gold For personal use only Social License • Kirkland Lake has shown that its people and the community within which Social License Assets they operate come first. Management Financial • The Detour Lake mine is located in area within a Canadian First Nations Strength tribe.
Slide 35: Pantoro Limited
Pantoro Kirkland Lake Limited For personal use only • ASX-listed emerging gold producer, $300m market cap • Already a producer but with a large growth project Norseman. Gold currently produced at Halls Creek is helping to fund exploration and development at Norseman. • Material exploration is taking
Slide 36: Pantoro Limited – Assets
Pantoro Kirkland LakeLimited Assets • Top tier jurisdictions in Australia For personal use only • Existing resources are substantial at 4.4 Moz grading 3.9 gpt. However, Exploration upside is material in our view and the real prize here. The area Social License Assets historically produced 6 Moz and
Slide 37: Pantoro Limited – Financial Strength
Pantoro Limited For personal use only Social License Assets Financial • Pantoro recently raised A$55m to accelerate the Strength Financial Management Strength development of Norseman; Pantoro will be able to fund Valuation aggressive exploration as well as progress development and ultimately constru
Slide 38: Pantoro Limited – Valuation
Pantoro Limited For personal use only Valuation Social License Assets • Valuation remains appealing although it isn’t the primary reason for Pantoro’s appeal. Financial Management Strength • On EV per ounce of resource, Pantoro is trading at a Valuation modest A$75 per ounce (assuming a fully funded
Slide 39: Pantoro Limited – Management
Pantoro Limited For personal use only Social License Assets Management • Pantoro’s management team is one of the strengths of Management Financial Strength the company. Solid mix of operational experience, exploration talent and development team to ramp up new Valuation projects. • The Strategic Val
Slide 40: Pantoro Limited – Social License
Pantoro Limited For personal use only Social License Assets Social License • Given Norseman has been a historically active gold Financial Management Strength mining jurisdiction for decades, the social licence to Valuation operate is a relatively mute point. All permits are in place and the company
Slide 41: Contact Information
Contact Information For personal use only Investor Relations Email: Investors@tribecaip.com.au Web: www.tribecaip.com Sydney Tribeca Investment Partners Pty Ltd Level 23, 1 O’Connell Street Sydney NSW 2000 Tel: +61 2 9640 2600 Singapore Tribeca Investment Partners Pte Ltd #16-01 Singapore Land Tower
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