Queen's Road Capital Investment Ltd. · TSX:QRC
Queen's Road Capital Investment — Investor Presentation (July 2024)
19 slides from Queen's Road Capital Investment's investor presentation, July 2024
Slide 1: Leading Financier to the Global Resource Sector
QUEEN’S ROAD CAPITAL INVESTMENT LTD. (TSX: QRC) Leading Financier to the Global Resource Sector Corporate Presentation July 2024
Slide 2: Cautionary Statement
Cautionary Statement IMPORTANT: PLEASE READ THE FOLLOWING BEFORE CONTINUING. The information contained in this document has been prepared by QUEEN’S ROAD CAPITAL INVESTMENT LTD. (“QRC” or the “Company”). The information contained in this document (a) is provided as at the date hereof and is subject
Slide 3: QRC – At A Glance
QRC – At A Glance • Leading source of investment capital to resource companies • Focuses on investment structures which, where possible, limit downside and retain upside • Preference for convertible debenture structures • Income during life of debenture through interest payment • Downside protected
Slide 4: QRC – At A Glance
QRC – At A Glance Ticker: QRC.TO Substantial Shareholders (> 1%) Share Price: C$0.82 52-Week High/Low: C$0.97/C$0.61 Corom Pty Ltd (Jack Cowin) 28.1% Avg. Daily Volume 96,442 shares BBRC International Pte Ltd (Brett Blundy) 15.9% Market Cap: C$374 million Warren Gilman (Chairman & CEO) 9.7% Institut
Slide 5: Leadership Team
Leadership Team Management Team Independent Directors Warren Gilman (Chairman & CEO) Michael Cowin • Mining Engineer • Principal at Corom Funds Management (family office for • 26 years at CIBC running mining investment banking in the Cowin Family) Canada, Australia and Hong Kong • 20 years as a fund
Slide 6: Supportive Shareholder Base
Supportive Shareholder Base Corom Pty Ltd. is an BBRC International Pte Ltd. is an Warren Gilman, High Net Worth investment vehicle owned and investment vehicle owned and Chairman & CEO, owns investors in Australia, controlled by Jack Cowin, a controlled by Brett Blundy, an 9.7% of QRC; all New Zeal
Slide 7: Investment Philosophy
Investment Philosophy Objectives QRC invests in public and privately held companies, primarily in the natural resource sector, with the objective of increasing shareholder return while seeking to preserve capital and limit downside risk by focusing on opportunities with attractive risk to reward pro
Slide 8: Shareholder Returns
Shareholder Returns • Since its inception, QRC has returned excess cash operating profits to shareholders in the form of dividends and share buybacks. Year 1 Year 2 Year 3 2021 2022 2023 Declared Dividend Per Share C$0.015 C$0.017 C$0.019 Dividend Yield at Announcement 2.0% 2.7% 2.9% Total Dividend
Slide 9: Why Focus on Converts?
Why Focus on Converts? Convert Royalty / Mining / Co Streaming Exploration Co Co Leverage to Commodity Prices ✘ ✘ ✘ Diverse Asset Base ✘ ✘ No Capital / Operating Cost Exposure ✘ ✘ Sustainable Dividend ✘ ✘ Low Overhead / G&A Cost Model ✘ ✘ Income Regardless of Production ✘ Upside from Underlying Equi
Slide 10: The Convert Model
The Convert Model • Investments in convertible 100% Equity debentures offer: Investment • Downside protected as debt structure ranks ahead of Underlying Equity Share Price 50/50 Equity shareholders / Convert • Full equity upside above the conversion price • Income regardless of macro / 100% Downside
Slide 11: Equity Raise vs. Convert Issuance
Equity Raise vs. Convert Issuance • For successful issuers, a convert makes a lot more financial sense than a brokered equity raising as the dilution negatively impacts significantly more than the coupon. Equity Convert Share Price at Issuance $1.00 $1.00 Equity Raise Price $0.85 -- Conversion Price
Slide 12: Investment Portfolio (Pro Forma)
Investment Portfolio (Pro Forma) US$70,000,000 9.0% Convertible Debenture US$50,000,000 11.0% Liquid Equity US$10,000,000 Convertible Debenture Portfolio 9.1% ($6.76 conversion; 09/28 term) Convertible (£0.90 conversion; 07/29 Debenture 10,675,128 Shares Equity Investment terms) (C$0.88-$4.33 conver
Slide 13: Investment Portfolio (Pro Forma)
Investment Portfolio (Pro Forma) Current Portfolio NAV Distribution Current Portfolio NAV Distribution (By Investment Type) (By Commodity) Convertibles: Black Scholes Equity 7% Copper Investments 20% Convertibles: 30% In The Money 6% Uranium Gold 53% 10% Royalties 10% Convertibles: Principal 57% Sil
Slide 14: Market Value of Investments (Pro Forma)
Market Value of Investments (Pro Forma) • Management’s Estimated Value of Investments at June 30, 2024. NXE 9.0% Coupon Convert NXE.TO Equity MOX 11.0% Coupon Convert GROY 10.0% Coupon Convert ISO.V (All) 8.5-10.0% Coupon Convert CTGO 9.0% Coupon Convert CEL.AX 9.0% Coupon Convert LA.V (All) 8.0% Co
Slide 15: Financial Performance
Financial Performance Revenue (Interest Income + Est. Fees) Net Income (Revenue less Operating Costs) $16.0 $12.0 $14.0 $10.0 $12.0 $8.0 $10.0 $8.0 $6.0 $6.0 $4.0 $4.0 $2.0 $2.0 $0.0 $0.0 CY 2020 CY 2021 CY 2022 CY 2023 CY 2024E CY 2020 CY 2021 CY 2022 CY 2023 CY 2024E Declared Dividend Net Asset Va
Slide 16: Public Market Valuation
Public Market Valuation • Despite seeing an almost 4 fold increase in NAV since inception 4 years ago, QRC trades at close to its all-time low P/NAV multiple. $1.20 1.60 $1.10 1.40 Price / NAV Multiple (x) $1.00 1.20 NAV / Share (CAD) $0.90 1.00 $0.80 0.80 $0.70 0.60 $0.60 0.40 $0.50 $0.40 0.20 $0.3
Slide 17: Public Market Valuation
Public Market Valuation • QRC remains undervalued compared to its peers on a number of different metrics. Dividend Yield x Adjusted OCF Multiple x Cash Operating Margin Cash Operating Margin 3.0% 30 Undervalued QRC Overvalued 2.5% 25 VOXR TFPM 2.0% 20 VOXR 1.5% ALS TFPM OR 15 SAND 1.0% OR SAND QRC O
Slide 18: Investment Highlights
Investment Highlights • DON’T LOSE SHAREHOLDERS MONEY • We LIMIT downside risk by investing in convertible DEBT securities • PAY AN ANNUAL DIVIDEND • We do so every year and plan to grow it every year • QUALITY ASSETS IN SAFE JURISDICTIONS • We scour the world for the best orebodies in any commodity
Slide 19: Thank You!
QUEEN’S ROAD CAPITAL INVESTMENT LTD. (TSX: QRC) Thank You!
Queen's Road Capital Investment — Investor Presentation (July 2024) on 6ix