Baker Steel Resources Trust Ltd GBP Ptg.Shs · LSE:BSRT
Baker Steel Resources Trust Ltd GBP Ptg.Shs — Baker Steel Resources Trust — Investor Presentation (May 2019)
21 slides from Baker Steel Resources Trust Ltd GBP Ptg.Shs's investor presentation, May 2, 2019
Slide 1: Baker Steel Resource Trust
Baker Steel Resource Trust Trevor Steel Chief Investment Officer and Managing Partner Baker Steel Capital Managers LLP 2 May 2019 1
Slide 2: Important
IMPORTANT This document is issued by Baker Steel Capital Managers LLP (“Baker Steel”), which is authorised and regulated by the Financial Conduct Authority (the “FCA”). Baker Steel is a Limited Liability Partnership registered in England No. OC301191. The information contained in this document has b
Slide 3: Baker Steel Resources Trust: Details and Investment Objectives
Baker Steel Resources Trust (“BSRT”) Details and Investment Objectives o BSRT is an LSE listed investment company launched in April 2010 o BSRT focuses on capital appreciation and returns through investing in private and specialist listed opportunities in the natural resources sector o Sponsor – Num
Slide 4: Independent directors
Independent directors Howard Myles (Chairman) Howard Myles currently acts as a non-executive director of a number of investment companies. He was a partner at Ernst & Young from 2001 until 2007 and was responsible for the Investment Funds Corporate Advisory team. He was previously with UBS Warburg f
Slide 5: Why Invest in Baker Steel Resources Trust?
Why Invest in Baker Steel Resources Trust? o Trust provides competitive advantage in private/specialist sector of resources investment universe o Closed ended permanent capital vehicle allows for less liquid, longer term, higher return type investments o LSE listing provides liquidity and price disc
Slide 6: Baker Steel Resources Trust Performance
Baker Steel Resources Trust Performance BSRT - 3 Year Performance 56.8p BSRT NAV 55 per share NAV per share / Share Price (GBP) 47.2p BSRT share 45 price 35 25 NAV per share 3 Year Performance to 31 December 2018 15 NAV : +70% over 3 years Share Price Share Price : +207% over 3 years 5 Source: Baker
Slide 7: Experienced Natural Resources Fund Manager
Experienced Natural Resources Fund Manager Baker Steel Capital Managers LLP BAKERSTEELo Assets under management and advisory of around USD 400m (as at 29 GLOBALFUNDS March 2019) o Established in 2001, with a presence in London and Sydney o Successful natural resources specialist with a proven track
Slide 8: Baker Steel's Natural Resources Fund Range
Baker Steel’s Natural Resources Fund Range Precious Metals Mining Equities Diversified Natural Resources BAKERSTEEL Precious BAKERSTEEL Baker Steel Metals Fund Electrum Fund Resources Trust A UCITS sub-fund with a long-only gold A UCITS sub-fund of a equities investment strategy Luxembourg SICAV An
Slide 9: BSRT Management Team
BSRT Management Team Investment Manager - Baker Steel Capital Investment Advisor - Managers LLP Rock Capital Trevor Steel David Baker Mark Burridge Francis Johnstone CIO & Fund Fund Manager Fund Manager Investment Advisor Manager • Over 25 years’ • Co-founded Baker • Founded Rock Capital in • Co-fou
Slide 10: Sources of Return
Baker Steel Resources Trust - Sources of Return Share price / % Project NPV Risk-Adjusted Development Curve 100% 90% o 4x is implicit in moving up the development curve o Additional safety margin – seek to 50% Normal buy at discount to realisation curve horizon o Seek to sell at 25% premium to the N
Slide 11: Target Returns and Investment Criteria
Target Returns and Investment Criteria o Target returns o >50% success ratio ---→10 - 15% annualised 10 deals o Metal prices move up ----→ 20% annualised 20 o What do we look for in a typical investment evaluations o Value – distressed /partner of choice o Clear route to returns – royalty income/cou
Slide 12: Risk Management
Risk Management Risk Mitigation Cost of Capital/equity dilution ➢ Quality Management - Delays ➢ Structuring - Capex overruns -interest/coupons (paid to wait) - Anti-dilution clauses Commodity price ➢ Assume long term prices in valuations ➢ Downside protection - Seek low cost producer assets - Royalt
Slide 13: Portfolio represented by 10 'core' investments
Portfolio represented by 10 ‘core’ investments Status % of NAV Company Commodity Location (Exchange) 21.2% Polymetal International PLC Gold/Silver Russia/FSU Listed (LSE) 13.8% Futura Resources Ltd Coking Coal Australia Unlisted 13.2% Bilboes Gold Ltd Gold Zimbabwe Unlisted 10.4% Cemos Group Cement/
Slide 14: Country, commodity and development stage diversified
Country, commodity and development stage diversified Commodity Allocation by Commodity (% NAV) Gold 31% Silver 14% Allocation by Development Status Coking Coal 14% % of net asset value Cement/Oil Shale 10% VALUE Iron Ore 8% Copper 5% 21% Potash 5% Tin 3% Cash and Other 10% 12% Location Allocation by
Slide 15: Portfolio Construction
Baker Steel Resources Trust Portfolio Construction Investment Type Allocation (% NAV) Unlisted Equity 28% o increasing exposure to royalties and Listed Equity 25% convertibles Convertible Loans 24% o Listed equity held Royalties 14% pending reinvestment Cash and Other 9% Source: Baker Steel internal
Slide 16: Case study – Polar Acquisition Limited
Baker Steel Resources Trust Case study – Polar Acquisition Limited • BSRT invested a total of US$15.7m, in a convertible loan - first investment 28 Feb 2011 • BSRT team took management control (64%) after debt/equity swap in Q1 2016 • Partnered with Polymetal in Q1 2017 • April 2018 sale agreement t
Slide 17: Recent investments
Baker Steel Resources Trust Recent investments Date Size Type Investment Mar 17 U$0.75m Structured Sarmin Mineral Exploration - Kanga potash equity projects • Structured with PFS funding carried by majority investor • 5x on initial investment to date Dec 17 A$10m Convertible Futura convertible – Wil
Slide 18: Value drivers: NAV drivers over the next 12-18 months
Baker Steel Resources Trust – value drivers NAV Drivers over the next 12-18 months 2019 2020 Q2 Q3 Q4 Q1 Q2 Q3 Polymetal Re-rating on gold sector Futura Wilton Mining License, debt financing to acquire stake in GC washplant and commence production Futura Royalty 1st Production and royalty payments B
Slide 19: Upside potential - Top 5 investments
Baker Steel Resources Trust Upside potential - Top 5 investments o Top 5 holdings are carried at US$59m, 63% NAV o They have a targeted potential value by 2024 of up to US$200m, or 3.4x upside on carry value o Top 5 holdings could build up to target potential of US$10m per year by 2024 or a 14% nomi
Slide 20: Returns policy and Top 5 Investors
Baker Steel Resources Trust Returns policy o >15% of realisations returned by way of tender offer o £4-5 million to be returned to shareholders o Details to released shortly o Plan to return income from investments in the future (as shown on previous slide this can be meaningful) Top 5 Investors Ove
Slide 21: Contact Information
Contact Information Fund Management & Client Services Baker Steel Capital Managers LLP 34 Dover Street London W1S 4NG Telephone: +44 (0)20 7389 8237 Fax: +44 (0)20 7389 8222 Email: enquiries@bakersteelresourcestrust.com For more information, please contact: Cosmo Sturge Director of Marketing Telepho
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