Tribeca Global Natural Resources Ltd. · ASX:TGF
Tribeca Global Natural Resources — Investor Presentation (March 2022)
47 slides from Tribeca Global Natural Resources's investor presentation, Mar 1, 2022
Slide 1: Investor Update Presentation February 2022 ASX announcement
1 March 2022 For personal use only ASX Market Announcements ASX Limited 20 Bridge Street Sydney NSW 2000 BY ELECTRONIC LODGEMENT Investor Update Presentation February 2022 Please find attached Investor Update Presentation. The information contained in this document has been prepared for use in conju
Slide 2: Tribeca Global Natural Resources Limited: Time to Add
For personal use only Tribeca Global Natural Resources Limited (ASX:TGF) “Time to Add” Ben Cleary, Portfolio Manager Todd Warren, Head of Research February 2022 Private And Confidential. Not For Public Distribution
Slide 3: Disclaimer
Disclaimer This presentation has been prepared for Tribeca Global Natural Resources Limited (ABN 16 627 596 418) (“TGF”) by its investment manager, Tribeca Global For personal use only Resources Pty Ltd (ABN 11 606 707 662) (“Tribeca”) under AFS License 239070 (Tribeca Investment Partners Pty Ltd).
Slide 4: Contents
For personal use only Contents 1. Corporate Update 3 2. Outlook for the Resources Sector 8 3. High Conviction Positions 28 4. Strategy Features 36
Slide 5: Focus on performance and closing the discount to NTA
Corporate Update For personal use only Our focus remains on generating strong investment performance and closing the discount to NTA which as at the last closing price¹ was $0.29 per share or $17.84m of shareholder value to be realised as the discount to post-tax NTA closes. All Members of the TGF b
Slide 6: Performance Update
Performance Update FY Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun YTD Key Details For personal use only 2018-19 -0.07% -0.36% -0.71% 0.16% -0.44% -0.16% 0.25% -3.24% 0.78% -3.78% ASX Code TGF 2019-20 -0.52% -1.93% -0.54% 0.60% 0.79% 3.67% -7.68% -7.52% -9.48% 5.74% 0.47% -13.96% -27.95% Share Pr
Slide 7: Active Management Performance Better Than ETFs/Indices
Active Management Performance Better Than ETFs/Indices For personal use only Bloomberg Commodity Index 1982-2022 250 Total Return and Annualized Return (Sep 2014-Dec 2021) 200 China Green 350% urbanization capex? 150 300% 100 250% 50 200% 0 1978 1980 1983 1985 1987 1990 1992 1994 1997 1999 2001 2004
Slide 8: Diversified and Heavily Exposed to Decarbonisation Beneficiaries
Diversified and Heavily Exposed to Decarbonisation Beneficiaries For personal use only Portfolio Breakdown RIO Tinto Portfolio Breakdown BHP Portfolio Breakdown (% of Gross Exposures as at 31 December 2021) (as % of EBITDA FY21) (as % of EBITDA FY21) Base Metals (37.07%) Battery Metals (24.26%) Bulk
Slide 9: Resources Have Rarely Looked Better
For personal use only Resources Have Rarely Looked Better
Slide 10: Commodities Have Rarely Looked Better
Commodities Have Rarely Looked Better For personal use only Commodities perform best in the “Hike Resource nationalization adding to supply Phase” tightness Commodity demand / supply tightest in Green policy driven demand decades ESG virtue signaling has created an China policy is supportive energy
Slide 11: Commodities Perform Best in the 'Hike' Phase
Commodities Perform Best in the ‘Hike” Phase Commodities perform best in the “Hike’ phase of the rates cycle. For personal use only Value Always Finishes the Cycle Higher Than Growth 180 Hold High 170 160 Hike Cut 150 140 Hold Low 130 Average annualized daily returns of different assets in different
Slide 12: Commodities Deficits Are Accelerating
Commodities Deficits Are Accelerating For personal use only Goldman Commodity Veteran Says “He’s Never Seen a China and EU smelting cuts have reinforced the open-ended Market Like It” 1,500 deficit conditions aluminium currently faces Historicals 1,000 GS aluminium global balance (Nov-21) 500 GS alu
Slide 13: Molecule Crisis to Continue
Molecule Crisis to Continue For personal use only US drilled but uncompleted wells (DUCs) 10,000 9,000 8,000 7,000 6,000 5,000 4,000 2014 2015 2016 2017 2018 2019 2020 2021 2022 Source: BA, Shaw & Partners analysis We expect reinvestment rates to remain low as producers attempt to attract investors
Slide 14: Resource Nationalization Highlights Supply Risks
Resource Nationalization Highlights Supply Risks Processing of many transition minerals is more geographically Major Latin American producers seeing downward spiral in resource For personal use only exposed to China than oil or gas. nationalism. (Global ranking, higher position = higher risk) Source
Slide 15: Secular Inflation Good for Commodity Producers
Secular Inflation Good for Commodity Producers A representative cost structure across three different commodities, Mining input cost inflation is set to reach a five-decade high… simplified into three major cost categories For personal use only 40% Cost Component by Commodity Mining cost index (FOB)
Slide 16: Chinese Policy Remains Supportive for Commodities
Chinese Policy Remains Supportive for Commodities For personal use only Carbon emission reduction required by 2060 to reach carbon neutrality Credit growth is accelerating which is key for commodity consumption in China (bn tonnes) 12 0.7 10 0.8 1.1 8 1.4 1.0 6 1.0 4 2 3.9 0 Source: UBS estimates So
Slide 17: Green Policy Driven Demand
Green Policy Driven Demand Required annual installations of renewables (wind and solar) GW to For personal use only China‘s Renewable Capacity Since 2010 reach 2060 net-zero target vs. 2016-2020 actual installations 250 600 25% Wind and solar capacity (GW) 500 % of total Capacity 20% 200 400 150 15%
Slide 18: Resources: ESG Upside To Be Unlocked
For personal use only Resources: ESG Upside To Be Unlocked
Slide 19: ESG 2.0: The Transition to Net Zero
ESG 2.0: The Transition to Net Zero For personal use only The $10T World’s largest asset manager rules out selling shares in carbon intensive companies “Divesting from entire sectors – or simply passing carbon-intensive assets from public markets to private markets – will not get the world to net ze
Slide 20: Oil Producers Unfairly Punished
Oil Producers Unfairly Punished For personal use only The oil and gas sector has materially derated as major However, this can reverse quickly if large pools of capital capital allocators have shunned the sector. like Blackrock come back to the sector. Oil producer equities have decoupled from the o
Slide 21: Divergent (or Dysfunctional?) ESG Ratings
Divergent (or Dysfunctional?) ESG Ratings For personal use only Barrick Gold Example 3 2 Normalised ESG Rating (max=4, min= -4) 1 0 ESG Ratings agencies differ widely: Barrick Gold, the world’s largest gold miner, has an -1 incredible 44% range in ESG score across the leading 10 ESG rating companies
Slide 22: Understanding Emission Curves is Increasingly Critical
Understanding Emission Curves is Increasingly Critical For personal use only Source: Skarn Associates 21 February 2022
Slide 23: M&A at the Bottom of the Emissions Curve
M&A at the Bottom of the Emissions Curve For personal use only 0% 25% 50% 75% 100% 2.5 Major Gold Miners: E1 GHG Emissions Curve E1: Refined Gold (tCO2 e/oz eq.) 2 Recent M&A Scope 1 (tCO e/oz eq.) Scope 2 (tCO e/oz eq.) transactions Freight (tCO e/oz eq.) Smelting/Refining (tCO e/oz eq.) Newmont Mi
Slide 24: A Stock Picker's Market
For personal use only A Stock Picker’s Market
Slide 25: Dealflow to Accelerate in 2022
Dealflow to Accelerate in 2022 For personal use only 24 February 2022
Slide 26: Sector Cheap and Primed for M&A Activity
Sector Cheap and Primed for M&A Activity For personal use only Historical P/NAV – North American Mining Companies Price to Cash Flow – North American Mining Companies Sector traded 4x higher on Price/CF basis in last M&A cycle Source: Company Reports, Scotiabank GBM estimates Source: Company Reports
Slide 27: Gold Sector Case Study
Gold Sector Case Study For personal use only EV/Ounce of Resource Divided by Gold Price – North American Gold Developers Gold Equities Have Decoupled With The Gold Price Multiples 3-5x current levels Source: FactSet, Scotiabank GBM estimates 26 February 2022
Slide 28: Electrification Feedstocks Likely Targets for M&A
Electrification Feedstocks Likely Targets for M&A Power applications Automotive Others Raw materials used in batteries For personal use only There is more to EV batteries than nickel, cobalt and lithium Carbon Solar Energy Electric Electric Light emitting Wind capture and photovoltaic storage vehicl
Slide 29: High Conviction Positions
For personal use only High Conviction Positions One Photovoltaic Cell (PV) Contains: • 20 grams (0.643 troy oz) of silver • 25% of global silver production expected to be consumed by the solar industry by 2025 • Rare earths - cadmium, gallium, germanium, indium, selenium, tellurium Source: Tribeca R
Slide 30: Portfolio Positioning & Outlook
Portfolio Positioning & Outlook For personal use only Current Portfolio Exposures by Theme (% NAV) Heavily exposed to decarbonisation and electrification across base and specialty metals, clean energy and carbon credits Green Policy Driven Demand Infrastructure & Fiscal Stimulus • Copper • Diversifi
Slide 31: Santos
Santos (ASX:STO) Major LNG focused global E&P player, with a significantly under- For personal use only Sector Oil & Gas appreciated net-negative carbon footprint in the near future. Position Type Fundamental Combination with Oil Search delivers strong and sustainable free cash Theme Green Policy Dr
Slide 32: Chalco (Aluminium Corporation of China)
Chalco (Aluminium Corporation of China) (2600:HK) One of the largest vertically integrated aluminium producers globally For personal use only Sector Base Metals Rapidly deleveraging as margins have widened Position Type Fundamental Recent share price performance has not kept up with rapidly Theme Gr
Slide 33: Glencore (GLEN:LON)
Glencore (GLEN:LON) Diversified miner funding an increasing exposure to battery metals via Sector Diversified For personal use only its thermal coal business. Substantive exposure to green metals Position Type Fundamental copper, nickel and cobalt Theme Green Policy Driven Demand ESG best practice:
Slide 34: Producers Enabling Decarbonisation
Producers Enabling Decarbonisation Syrah Resources (ASX:SYR) American Pacific Borate (ASX:ABR) Alpha HPA (ASX:A4N) For personal use only Strategic natural graphite resource, strategic Strategic boron resource, strategic location of Low capex, low opex, low carbon producer of location of processing f
Slide 35: Carbon Credits: An Emerging Opportunity
Carbon Credits: An Emerging Opportunity For personal use only To meet 2050 carbon neutrality all companies will have to Up to100x reduce, abate or offset There is a large disparity among carbon prices globally and our <7.0 -13.0 core thesis is that voluntary prices for nature-based projects NGFS "im
Slide 36: Compliance Carbon Market vs Voluntary Carbon Markets
Compliance Carbon Market vs Voluntary Carbon Markets For personal use only The massive growth in regulated carbon prices Global Carbon Prices (USD per tonne) and the underlying growth in demand for carbon $120 offsets are yet to be reflected in internationally traded credits. This provides an opport
Slide 37: Strategy Features
For personal use only Strategy Features One Photovoltaic Cell (PV) Contains: • 20 grams (0.643 troy oz) of silver • 25% of global silver production expected to be consumed by the solar industry by 2025 • Rare earths - cadmium, gallium, germanium, indium, selenium, tellurium Source: Tribeca Research
Slide 38: Tribeca Global Natural Resources Team
Tribeca Global Natural Resources Team Investment Team Operations and Finance For personal use only Ben Cleary Todd Warren Haydn Smith James Howes Ken Liu David Bridge Portfolio Manager Head of Research Head of Credit Chief Operating Officer Compliance Manager Head of Investor Relations Years in Indu
Slide 39: Strategy Features
Strategy Features For personal use only Actively Managed Constrained Leverage Actively managed, specialized long Low gross positioning to short strategy. Variable Net <200% Gross achieve superior risk adjusted Exposure Exposure returns with low correlation to major asset classes. High Conviction Str
Slide 40: Investment Universe
Investment Universe A flexible approach allows focus on the best risk-reward opportunities as well as the ability to invest across the value chain For personal use only Clean Energy & Transition Fuels Metals & Mining Soft Commodities Oil & Gas Base Metals Crops Uranium Bulks Agriculture Hydrogen Spe
Slide 41: Investing Across the Value Chain
Investing Across the Value Chain A flexible, long short, mandate and deep knowledge of value chains from project to end-user allows for the capture of different For personal use only payoff profiles at different points in the cycle. Metals and Mining Value Chain Example Exploration & Engineering Tra
Slide 42: Investment Process
Investment Process Investment Process For personal use only Commodity Ranking Macro Overlay Fundamental Research Investment Idea Generation Implementation Global commodity demand Analysis of investor Sector and stock specific Investments expressed High conviction, detailed and supply modelling. posi
Slide 43: Sources of Alpha
Sources of Alpha For personal use only Flexibility within the mandate to take advantage of different types of trades across the natural resources complex, depending on best risk-reward and market environment. Weighting of different types of trades will vary depending on prevailing market structure a
Slide 44: Stock Selection Philosophy
Stock Selection Philosophy For personal use only Investing in the best assets Commodities with the highest Fixed economic rent potential and assets that are resilient through the cycle Only Assets Cannot be Changed Best management ✓ Ownership can change Culture and capabilities that enable ✖ Attribu
Slide 45: Portfolio Construction Framework
Portfolio Construction Framework For personal use only Trade type, market cap and position sizing Trade Type, Market Cap and Position Sizing Typology are all fundamentally linked Long Short Relative Value Special Situations Weighting to different trade type will vary >$5bn Mkt Cap depending on marke
Slide 46: ESG Approach
ESG Approach In addition to rigorous financial analysis of companies, investments are also assessed through the lens of Environmental, Social and For personal use only Governance (ESG) factors. Companies that do not score highly from an ESG perspective are excluded from investment. A hands-on approa
Slide 47: Investor Relations
For personal use only Investor Relations Email: TGFinvestors@tribecaip.com Web: www.tribecaip.com/lic Singapore Tribeca Investment Partners Pte Ltd #16-01 Singapore Land Tower 50 Raffles Place, Singapore 048623 Tel: +65 6320 7711 Sydney Tribeca Investment Partners Pty Ltd Level 23, 1 O’Connell Stree
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