Lion Selection Group Ltd. · ASX:LSX
Lion Selection — Shareholder Meeting (December 2022)
30 slides from Lion Selection's shareholder meeting presentation, Dec 7, 2022
Slide 1: Lion Selection Group AGM
For personal use only Lion Selection Group AGM 7 December 2022 www.lionselection.com.au
Slide 2: Disclaimer
This presentation does not constitute investment advice. Neither this presentation nor the information contained in it constitutes an offer, invitation, solicitation or recommendation in relation to the purchase or sale of shares in any jurisdiction. This presentation does not take into account any
Slide 3: Lion Selection Group
Lion Selection Group For personal use only Lion Selection Group (Lion) is an ASX listed mining ASX : LSX investor (ASX:LSX), with a strong balance sheet and 47cps (share price 30 Nov 2022) ability to invest in a weakening junior resources 63.6cps (NTA 30 Nov 2022) 1 5cps (Dividends paid in 2022) mar
Slide 4: NTA: Will become predominantly cash in 2023
For personal use only NTA: Will become predominantly cash in 2023 Lion is extremely strongly positioned to invest in a weakening market ASX:LSX lionselection.com.au 4
Slide 5: Net Tangible Assets
Net Tangible Assets US$30M For personal use only (Merdeka Shares Nusantara SOLD / Deferred Cash) Pani SOLD To become cash Jul-21 Nov-22 Feb-23 62.6cps 2 63.6cps 1 (Projected) 5cps Dividends Further Special 3.5cps PAID (Apr 22) Dividend: 1.5cps PAID (Oct 22) April 2023 Share Price 44cps 47cps Discoun
Slide 6: Dividends 2023
Dividends 2023 Lion strongly positioned for For personal use only new opportunity investment focussed on Australia Catalpa share 26.7cps 3.5cps 1.5cps 10cps 10cps 10cps 10cps 10cps 3cps 3cps 8cps 3cps 3cps 1997 Lion IPO 2009-2013 National Stock Exchange 2009 2012-2022 Demerger Period of investment i
Slide 7: Pani Exit
Pani Exit For personal use only • [at least] US$52M total value 3 • 17% above NTA • 3.5x return on investment • Exit at logical point of asset cycle Prior to substantial capex • Lion recommenced dividends • Return to investing ASX:LSX lionselection.com.au 7
Slide 8: Pani Exit Consideration [at least] US$52M
Pani Exit Consideration [at least] US$52M For personal use only US$22m Banked US$10m Deferred Cash Value Protection Cash top up US$20m Merdeka Stock ASX:LSX lionselection.com.au 8
Slide 9: Pani Exit Consideration [at least] US$52M
Pani Exit Consideration [at least] US$52M For personal use only Pani sale completion Early 2023: • Sale of Merdeka stock • Receipt of deferred cash ASX:LSX lionselection.com.au 9
Slide 10: PhosCo Limited
PhosCo Limited ASX : PHO (A$3.2M invested / A$5.5M market value) For personal use only Tunisia / Rock Phosphate Chaketma Phosphate Project Sekarna Phosphate Project Potential Tier-1, long life mine with downstream 100% PhosCo fertiliser production optionality ▪ Global JORC 2012 ▪ Large scale, outcro
Slide 11: Erdene Resource Devt Corp
Erdene Resource Devt Corp TSX : ERD (A$2.9M invested / A$4.1M market value) For personal use only Mongolia / Gold Shovel-ready gold project, expanding into a district • Dec 2015: Bayan Khundii high grade gold discovery (7m at 27.5g/t gold) 5 • Sep 2018: Bayan Khundii Maiden Resource • Jul 2020: Baya
Slide 12: Plutonic Limited
Plutonic Limited UNLISTED (A$1.0M invested / A$1.0M market value) For personal use only Australia / Gold • Association with G3 structural corridor: Hosts multiple large deposits (e.g. Tanami) • Reactivated as a rift zone at same time as formation of Victorian Gold fields • Rift-zones at right angles
Slide 13: Portfolio
Portfolio Industry project maturity profile – typically a pyramid For personal use only • Merdeka To be sold: early 2023 In compliance with the Pani sale agreement Development / Operations • Erdene Legacy investments • PhosCo • Very well understood • Kasbah Feasibility studies • Lion intends to be o
Slide 14: Investment Approach
Investment Approach Investment proportionally targeted For personal use only Development / Operations Cautious investor whilst market De-risking • Erdene weakens Balance sheet provides huge • PhosCo • Kasbah optionality Target portfolio: • Diverse commodity mix (precious Feasibility studies / base /
Slide 15: Investment Approach
Investment Approach For personal use only “Periods of extreme volatility have historically provided some of the most lucrative investment opportunities in companies that depend on market funding” ASX:LSX lionselection.com.au 15
Slide 16: New Investment Opportunities
New Investment Opportunities For personal use only ASX:LSX lionselection.com.au 16
Slide 17: Equity market – sensitive to inflation / rates outlook and volatile
For personal use only Equity market – sensitive to inflation / rates outlook and volatile Junior resources companies are the biggest victims of liquidity collapse ASX:LSX lionselection.com.au 17
Slide 18: Equities, Rates and Inflation
Equities, Rates and Inflation For personal use only US Recessions S&P500 US Equity index Rates US Fed Funds Rate Inflation US CPI 12mo % Source: IRESS data, US Federal Reserve ASX:LSX lionselection.com.au 18
Slide 19: Liquidity – ASX Resources IPOs
Liquidity – ASX Resources IPOs For personal use only Cycle Peak Years Liquidity Number of Resources has IPOs per year dropped… Source: ASX Announcements, Lion Manager ASX:LSX lionselection.com.au 19
Slide 20: Liquidity – Exploration Expenditure (Australia)
Liquidity – Exploration Expenditure (Australia) For personal use only A$ Millions Per Quarter Meters Drilled …Activity not yet impacted Source: Australian Bureau of Statistics ASX:LSX lionselection.com.au 20
Slide 21: Liquidity – 2023 test
Liquidity – 2023 test For personal use only “It is easier for a camel to pass through the eye of a needle, than for a cum-issue explorer to enter the kingdom of fund raising in February” ASX:LSX lionselection.com.au 21
Slide 22: Resources Equities: Volatility & Weakness
19 April 2022 - Present % of co’s in group with Resources Equities: Volatility & Weakness negative performance For personal use only 68% ASX100 Resources 78% ASX Small Resources 79% A$50-100M Market Cap No Index: Mineral Greater prevalence of negative performance in Resources companies smaller marke
Slide 23: The Lion Clock Conclusions
The Lion Clock Conclusions Just past 12. For personal use only This is the time when junior resources stocks are most at risk – funding challenges lead to equity price weakness Equities 2023 1 2 2021 Tech led weakness Many junior 2020 Miners resilient resources Junior miners – companies need to liqu
Slide 24: For personal use only
Lion Selection Group (Lion) is an ASX listed mining investor (ASX:LSX), with a strong balance sheet and ability to invest in a weakening junior resources For personal use only market. Lion currently has exposures to gold, copper, nickel and phosphate, but the main asset is cash. Lion provides a simp
Slide 25: Appendices
For personal use only APPENDICES ASX:LSX lionselection.com.au 25
Slide 26: Lion Selection Group – Established 1997
Lion Selection Group – Established 1997 Strongly positioned to invest in a weakening market For personal use only Well Funded Strong cash position following large asset divestment Proven Approach 25 years experience / strong deal flow / exceptional people networks Target Investments Pre-production m
Slide 27: Lion Investing Focus
Lion Investing Focus For personal use only Australia Focus Commodity Diversity for new investments Precious, Base and Strategic materials ✓ Global mining investment Precious Metals destination of choice ✓ Efficient and accessible Au Ag PGE ✓ Low to moderate ✓ Geologically rich and processing risks d
Slide 28: Board & Management
Board & Management Strong Foundation For personal use only MANAGEMENT TEAM BOARD Barry Sullivan Peter Maloney Chris Melloy Robin Widdup Craig Smyth Hedley Widdup Chairman Non-Executive Director Non-Executive Director Managing Director Executive Director Executive Director Barry is a mining Peter has
Slide 29: Experience: Funding / Strategic Development / M&A
Experience: Funding / Strategic Development / M&A History Pani JV Interest Long-term investments For personal use only • Gold / Indonesia $21m invested Active Exit Management • • $74m exit 3 Profitable Outcomes $5.9m invested C$16.8m invested $9.5m exit C$25.4m exit $33.8m invested $23.4m invested $
Slide 30: Footnotes
1. Lion Selection Group ASX announcement dated 6 December 2022, Net Tangible Footnotes Asset Backing 2. Lion Selection Group ASX announcement dated 13 August 2021, Net Tangible For personal use only Asset Backing 3. Lion Selection Group ASX announcement dated 31 January 2022, Sale of Pani JV interes
Lion Selection Group — Shareholder Meeting (December 2022) on 6ix