Lowell Resources Funds Management Ltd · ASX:LRT
Lowell Resources Funds Management — Lowell Resources Fund — Investor Presentation (September 2024)
49 slides from Lowell Resources Funds Management's investor presentation, Sep 30, 2024
Slide 1: Lowell Resources Fund Investor Presentation September 2024
LOWELL RESOURCES For personal use only FUNDS MANAGEMENT LOWELL RESOURCES FUND INVESTOR PRESENTATION SEPTEMBER 2024 400 350 300 250 200 150 100 50 ABN 36 006 769 982 AFSL 345674
Slide 2: Disclaimer
Disclaimer Important Notice • This presentation does not constitute investment advice. Neither this presentation nor the information contained in it constitutes an offer, For personal use only invitation, solicitation or recommendation in relation to the purchase or sale of units or shares in any ju
Slide 3: 1. Overview
Lowell Resources Fund For personal use only 1. Overview ASX.LRT 3
Slide 4: Fund Summary August 2024
Fund Summary 31 August 2024 350 Overview LRT 5 Year Total Return incl distributions For personal use only Rebased to 100 Fund size (NAV) A$44.0 m 300 Units on issue 34.5m units Net Asset Value 31/08/24 (post- $1.28/unit distribution) 250 Distribution FY24 paid 31/07/24 $0.152/unit ASX Unit Price on
Slide 5: ASX Traded Discount to NAV
ASX Traded Discount to NAV 10% For personal use only <$200m ASX LIT/LIVs Avge Discount LRT Discount to NAV 5% 0% -5% -10% -15% -20% -25% -30% -35% Source Bell Potter 5
Slide 6: Fund Summary: Characteristics of the Fund
Fund Summary Characteristics of the Lowell Resources Fund For personal use only Nature of Fund • Long only, ungeared fund Investee • Small mining & energy companies, predominantly in the exploration phase offering major growth Companies potential Investment • Predominantly listed equities globally T
Slide 7: Our Strategy: Investing in Exploration Stage
Our Strategy: Investing in Exploration Stage Capitalising on value accretion: optimal stage For personal use only Drill out / Resource Feasibility & Production Expansion Reserves LRT TARGET INVESTMENT STAGE Share Price Commissioning Financing Discovery Construction Exploration Time Leverage: miles
Slide 8: Investment Committee
Investment Committee Members For personal use only John Forwood, Richard Morrow, Stephen Mitchell, Stuart Baker, Investment Chief Investment Officer Committee Member Investment Committee Investment Committee Mr Forwood is a trained Member Chair geologist and lawyer, with Mr Baker has a strong local
Slide 9: LICs & LITs
LICs & LITs NTA Compound Annual Growth Rate over 5 years • Outperformance For personal use only • Uncorrelated 9
Slide 10: Fund Performance
Fund Performance For personal use only S&P/ASX Small ASX Resources Total Portfolio LRT Change in ASX 200 Index Resources 300 Index Performance to 31 NAV per unit incl Accumulation Index (Total Return) August 2024 distributions (Total Return) (XSRAI) 12 months -4.7% -1.8% -7.7% 14.9% 5 years p.a. 21.
Slide 11: LRT Portfolio by Resource Development Stage
For personal use only 0% 10% 20% 30% 40% Grass Roots Exploration & Resource Feasibility Pre-development 31 August 2024 Development LRT Portfolio by Resource Development Stage Production Cash 11
Slide 12: LRT Commodity Exposure
LRT COMMODITY EXPOSURE Mineral Sands Uranium Helium 31 AUGUST 2024 1% For personal use only Cash 2% 2% 10% Nickel Gold & PGM Battery 1% 45% 3% O&G 11% Base Metals 22% REE Silver 0% 12 3%
Slide 13: Portfolio Characteristics August 2024
Portfolio Characteristics 31 August 2024 Portfolio by Geography of Main Project For personal use only Asia/Pacific, 5% Cash, 10% North America, Africa, 12% 15% Europe, 3% Investment Listing London 1% Latin America, 13% Cash Unlisted 10% 10% Australia, 42% North America 15% ASX 64% 13
Slide 14: We Invest in Explorers because Explorers Make the Discoveries
We Invest in Explorers….because Explorers Make the Discoveries Australian Mineral Discoveries by Company Size For personal use only Source: Minex Consulting 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Unkown Other Small Major Moderate Junior Producer Company Producer Explorer 2000-2009 2010
Slide 15: Market Thematics: Key Market Factors
Market Thematics For personal use only 2. Key Market Factors 15
Slide 16: Commodities Undervalued vs Equities
Commodities Undervalued vs Equities For personal use only 16
Slide 17: Small Caps vs Large Caps
Small Caps vs Large Caps For personal use only Small Equities decouple from Large Caps 17
Slide 18: Gold Price vs HUI Gold Index
Gold Price vs HUI Gold Index For personal use only Gold 30% above 2011 peak, but HUI 50% below HUI today is only 10% above its August 2016 level- when gold was US$1,300 per ounce. HUI’s earnings per share expected to quadruple this year compared to 2016. Gold Equities decouple from Gold Price 18
Slide 19: Central Banks & Gold
Central Banks & Gold For personal use only Ukraine War China Gold Reserves can grow 19
Slide 20: Australian Gold Producers
Australian Gold Producers Cash holdings (AUD$mil) Australian Gold Producers For personal use only 140 $1,000 $900 120 $800 100 $700 $600 80 Average Cash $500 equivalents 60 $400 ~A$350million $300 40 $200 20 $100 0 $0 CMM EMR GOR GMD WAF WGX RMS RSG RED RRL PRU Qtrly Production (koz au) Net Cash & B
Slide 21: Copper vs ASX Junior Resources
Copper vs ASX Junior Resources Copper price vs S&P Small Resources Ordinaries Index For personal use only 8,000.00 5 7,000.00 4 6,000.00 5,000.00 3 Junior Cu price Equities $US/lb 4,000.00 XSRAI decouple from 2 3,000.00 Copper Price 2,000.00 1 1,000.00 0 0.00 1994 1999 2005 2010 2016 2021 2027 21
Slide 22: O&G Drilling - WA
O&G Drilling - WA For personal use only Sustained underinvestment globally in oil (and metal mining) Source: Strike Oil 22
Slide 23: Gold in USD vs US CPI – 1980's
Gold in USD vs US CPI – 1980’s For personal use only Possible similar scenario to the 1970’s playing out for gold 23
Slide 24: Investment Examples: Recent Outperforming Stocks
Investment Examples For personal use only 3. Recent Outperforming Stocks 24
Slide 25: Azure Minerals
Azure Minerals For personal use only Azure Minerals LRT Investment $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $- Jul-21 Jul-22 Jul-23 Jan-21 Jan-22 Jan-23 $(0.50) $(1.00) LRT Trade (A$ mil) AZS Price 25
Slide 26: Southern Cross Gold SXG.ASX
Southern Cross Gold SXG.ASX $3.50 LRT For personal use only $3.00 Investments $2.50 $2.00 $1.50 $1.00 $0.50 Seed $- 05/17/2022 09/26/2022 2/07/2023 06/19/2023 10/27/2023 3/08/2024 26
Slide 27: Case Study: De Grey Mining
Case Study: De Grey Mining De Grey Mining (DEG.ASX) For personal use only $1.80 $1.60 LRF Sales $1.40 $1.20 $1.00 LRF Investments $0.80 $0.60 $0.40 $0.20 $0.00 27
Slide 28: Current and Upcoming: Preferred Positions
Current and Upcoming For personal use only 4. Preferred Positions 28
Slide 29: Top Positions
Top 10 Positions LRT Portfolio at 31 August 2024 For personal use only Code Company Commodity Portfolio Weight Comment RMS Ramelius Resources Gold 8.2% Held from scrip takeover of Musgrave Minerals PDI Predictive Discovery Gold 5.4% Tier 1 African gold discovery – subject to M&A AAR Astral Resources
Slide 30: Some Outstanding Opportunities
Some Outstanding Opportunities Region Commodity Existing Holding? Comment For personal use only Eastern Australia Tin No Low capex scoping study with high grade exploration Western Australia Gold Yes High grade +1Moz resource with potential infrastructure solution Western Australia Gold Yes Medium g
Slide 31: Lowell – a Unique Investment Opportunity
Lowell – a Unique Investment Opportunity For personal use only 01 Fund Focus • One of the few investment funds that offers exposure to the junior 01 02 resources sector across Australia and global stock exchanges in unlisted and listed companies 02 Successful track record for 20 years • Superior per
Slide 32: Contact
Contact For personal use only Investment Responsible Entity Manager LOWELL RESOURCES CREMORNE CAPITAL LIMITED FUNDS MANAGEMENT ACN 006 769 982 ACN 006 844 588 AFSL 345674 AFSL 241175 Address Level 6, 412 Collins Street, Address Melbourne VIC 3000 8 Chapel Street, Tel: (03) 9642 0655 Richmond VIC 312
Slide 33: Appendix: Resources Market Information
Appendix 1 For personal use only Resources Market Information 33
Slide 34: Month Commodity Prices
12 Month Commodity Prices 12 month change to Sept 2024 For personal use only Lithium Carbonate Iron Ore 62% Nickel Neodymium Natural Gas Oil (Brent) Lead Thermal coal Platinum Copper Manganese 37% Zinc Silver Tin Gold (AUD) Gold (USD) Uranium -80% -60% -40% -20% 0% 20% 40% 60% 34
Slide 35: Lead Time for New Mines
Lead Time for New Mines For personal use only 35
Slide 36: Lead Time for New Mines
Lead Time for New Mines For personal use only 36
Slide 37: IEA Metals Recycling
For personal use only IEA Metals Recycling -
Slide 38: Gold Miners to Gold Price Ratio
Gold Miners to Gold Price Ratio For personal use only 38
Slide 39: Copper Consumption 1900-2023
Copper Consumption 1900-2023 For personal use only 39
Slide 40: Oil Market
Oil Market For personal use only Oil traders reported to return to metals in H1 2024 40
Slide 41: Appendix: Fund Structure and Process
Appendix 2 For personal use only Fund Structure and Process 41
Slide 42: Fee Structure
Fee Structure Gross Asset Value Existing Management Fee For personal use only < $20m $300,000 p.a. plus 0.6% Next $20m - $50m 2.100% Next $50m - $150m 1.600% Next > $150m 1.600% PERFORMANCE FEES (calculated 6 monthly) Variables Existing Benchmark 10% pa outperformance Fee rate 17.5% Calculated & Pai
Slide 43: Stock Selection
Stock Selection Top down focus Criteria For personal use only Management • Macroeconomics Geographic location • Equity markets 1 Geological setting Resource/ Reserve magnitude • Market sectors Grade, metallurgy • Commodities 2 Stage Infrastructure and market Indicative economics • Re
Slide 44: Our Investment Process
Our Investment Process For personal use only Organisation Due Deal Monitoring Investment Disposal: Existing Diligence: Structuring: and Additional Committee On-market / Network In-house Placement/I Reporting: Investment Approval Trade Sale expertise PO/ on- Up to weekly market LRFM prefers to keep
Slide 45: Application in Portfolio
Application in Equities allocation Portfolio For personal use only Core Manager Core Manager 2 3 Lowell Resources Fund Core Manager (LRT.ASX) 1 Small Caps • There is a compelling case for Lowell Resources Fund to be in an equities portfolio (Australian or Global), as one of the small cap manager all
Slide 46: Appendix: Portfolio Analysis
Appendix 3 For personal use only Portfolio Analysis 46
Slide 47: LRT Commodity Allocation over Time
LRT Commodity Allocation over Time For personal use only Battery, 4% 2% 5% 5% 2% 7% 4% Nickel, 8% 7% 10% 8% 12% 6% 7% 1% 13% 16% 6% Oil & Gas, 7% 9% 8% 9% Base Metals, 6% 9% 19% 17% 15% 21% 21% 19% 19% 20% 22% Au/Ag/PGM, 57% 37% 54% 50% 42% 42% 48% 45% 34% 16% Cash… 12% 9% 7% 5% 4% 3% 4% 2016 2017 2
Slide 48: LRT Project Stage Allocation
LRT Project Stage Allocation Porfolio by Project Stage For personal use only 100% 7% 6% 4% 2% 2% Production, 13% 80% 14% 14% 19% 22% 20% 22% 60% Feasibility, 18% 19% 45% 59% 38% 40% 47% 14% 35% Exploration & Resource, 37% 20% 33% 23% 25% 18% 15% Grass Roots, 14% 17% 0% 2018 2019 2020 2021 2022 2023
Slide 49: LRT Top Holdings
LRT Top 20 Holdings LRT Holdings by Value 31 August 2024 For personal use only ADX RUG KAR HAN AAR TWO RZ CIPANGO RMS COI FVL UNITY USL CZR PDI STN CVV ORDELL' SPD AAM 49
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