Tribeca Global Natural Resources Ltd. · ASX:TGF
Tribeca Global Natural Resources — Investor Presentation (July 2022)
38 slides from Tribeca Global Natural Resources's investor presentation, Jul 25, 2022
Slide 1: ASX Market Announcement cover letter
25 July 2022 For personal use only ASX Market Announcements ASX Limited 20 Bridge Street Sydney NSW 2000 BY ELECTRONIC LODGEMENT Investor Update Presentation July 2022 Please find attached Investor Update Presentation. The information contained in this document has been prepared for use in conjuncti
Slide 2: Tribeca Global Natural Resources Ltd Investment Update
For personal use only Tribeca Global Natural Resources Ltd (ASX:TGF) Investment Update Ben Cleary, Portfolio Manager Todd Warren, Head of Research July 2022 Private And Confidential. Not For Public Distribution Submarine cable for an offshore wind turbine, 50kg/m of copper needed
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 Resources For personal use only Pty Ltd (ABN 11 606 707 662) (“Tribeca”) under AFS License 239070 (Tribeca Investment Partners Pty Ltd).
Slide 4: Agenda
For personal use only 1. Corporate Update 4 2. Performance Review 5 3. Macro Outlook 11 4. Sector Views and Outlook • Base & Battery Metals • Oil & Gas 23 • Uranium • Carbon Credits 5. Appendix: TGF Strategy Summary 28
Slide 5: For personal use only
Corporate Update For personal use only • As at last closing price¹, there is $0.31 per share or $19.4m of shareholder value to be realised by a closing of the discount to post tax NTA. • Members of the portfolio management team and directors continue to increase their personal investments in TGF (re
Slide 6: Performance Update
Performance Update FY Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun FYTD Key Details¹ 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
Slide 7: Metals and Uranium the Primary YTD Detractors
Metals and Uranium the Primary YTD Detractors For personal use only YTD Gross Attribution by Sector QTD Gross Attribution by Sector Bulks Bulks Diversified Credit and Unlisted Credit and Unlisted Diamonds Diamonds Soft Commodity Soft Commodity Credit Fund Credit Fund Carbon Credits Oil and Gas Renew
Slide 8: High Correlation with USD Strength Expected to Breakdown
High Correlation with USD Strength Expected to Breakdown For personal use only Copper price showing strong negative correlation to strengthening USD 550 95 • Commodities suffered in 2Q due to 500 100 high negative correlation with a rising 450 USD, hitting extreme levels against 400 105 EUR/JPY/GBP.
Slide 9: Positioning at Extreme Bearish Levels
Positioning at Extreme Bearish Levels Total Oil Speculative Positioning Remains Extremely Low CFTC Net Speculative Copper Positioning 8,000,000 For personal use only 150000 7,500,000 100000 7,000,000 Price (USD) 6,500,000 50000 6,000,000 0 5,500,000 -50000 5,000,000 4,500,000 -100000 Jun-18 Sep-18 D
Slide 10: Synopsis of Returns
Synopsis of Returns For personal use only • After seven consecutive quarters of positive performance which saw the Company’s NTA increase by 76.9% on a post- Understandable Price Moves Disconnected Price Moves tax basis, the TGF NTA fell by -23.85% over 2Q 2022. • US and Europe recession fears coupl
Slide 11: Current Positioning
Current Positioning Net Exposures by Sector Top 15 Equity Positions (alphabetical order) For personal use only Base Metals Battery Metals Oil and Gas Carbon Credits Uranium Diamonds Precious Metals Credit Fund Diversified Bulks Services Renewables Credit and Unlisted Soft Commodity 0.00% 5.00% 10.00
Slide 12: Macro Outlook
For personal use only Macro Outlook
Slide 13: Macro Outlook Summary
Macro Outlook Summary For personal use only Disconnect between fundamentals and price action • Positioning remains extremely bearish • Valuations factoring in severe slowdown/recession – 2014 industry lows/GFC levels China policy expected to be supportive during 2H22 • China macro data turning posit
Slide 14: Disconnect Between Fundamentals and Price Action
Disconnect Between Fundamentals and Price Action • Lack of stock specific negative news across TGF portfolio. 4th Week of Resources Outflows For personal use only Resource flows • Consensus is overwhelmingly bearish. 10 Resources (energy + materials) flows, $bn Resources (energy + materials) flows,
Slide 15: Despite Extreme Bearishness Fundamentals Remain Solid
Despite Extreme Bearishness Fundamentals Remain Solid For personal use only These Fortune 500 reported week of 15 July 2022, noting continued strong structural demand and robust financial health. “The consumer is strong and demand “Despite this near-term volatility, I “There's a disconnect in today'
Slide 16: Equities Already at GFC/2016 Trough Valuations
Amazingly Equities Already at GFC/2016 Trough Valuations For personal use only This is despite far healthier balance sheets than in GFC/2016 and superior demand outlook. • Jefferies stress test shows key producers trading below trough levels based on the following methodology: • Using depressed comm
Slide 17: China Stimulus Expected to be Supportive in 2H and into 2023
China Stimulus Expected to be Supportive in 2H and into 2023 Credit cycle remains on the upturn • China’s COVID lockdown impact reversing. yoy% For personal use only 15 24 Credit impulse TSF growth, rhs • Potential for FAI focused stimulus to supercharge the economy. 10 21 • China’s economic cycle o
Slide 18: Commodity Deficits To Persist Despite Recessionary Fears
Commodity Deficits To Persist Despite Recessionary Fears Even assuming a recessionary case, a large number of commodity markets, such as copper, are in supply deficit and recent production guidance continues to disappoint. For personal use only Market is already pricing a global recession scenario f
Slide 19: Structural Deficits for Most Commodity Markets
Structural Deficits for Most Commodity Markets For personal use only Million tonnes Global Primary Aluminium Surplus / Deficit 2020-2030E Lithium market balance – in deficit this year and onwards 2 We still see a deficit in the 2022 aluminium market, but Lithium Supply/demand(LCE,kt) 3000 a lower on
Slide 20: Inventories Materially Tighter Versus Previous Downturns
Inventories Materially Tighter Versus Previous Downturns Current inventory levels for key commodities such as copper and crude leave very little buffer for disruption. For personal use only Global commercial crude oil inventories (not including SPR) Total Copper Exchange Stocks in weekly high-freque
Slide 21: Green Capex Thematic Hasn't Gone Away
Green Capex Thematic Hasn’t Gone Away Carbon capture utilization Battery storage Low emission fuels | $52bn For personal use only & storage | $90bn $132bn • From Fossil fuels • Biogas (RNG) • Direct air capture • Liquid biofuels • From biofuels • Hydrogen w/ CCUS • CO2 transportation • Hydrogen elec
Slide 22: Massive Investment Required to Meet Decarbonization Goals
Massive Investment Required to Meet Decarbonization Goals Metals & Mining: relevant for key products such as copper, aluminium, lithium, nickel, cobalt, which enable downstream electrification, For personal use only automation and efficiency (US$bn) Metals and mining committed investment capex and r
Slide 23: Pickup in M&A Activity Likely But Doesn't Solve Deficits
Pickup in M&A Activity Likely But Doesn’t Solve Deficits For personal use only Mining sector has witnessed significant consolidation over the • Mining sector more concentrated than 20 last two decades. years ago. Macro Outlook for the Natural Resources Sector • Healthy balance sheets and cash genera
Slide 24: Key Sector Views and Positioning
For personal use only Key Sector Views and Positioning
Slide 25: Base & Battery Metals
Base & Battery Metals For personal use only Key Positions • Fundamental bull case for the commodities exposed to the decarbonisation thematic remains intact. Company Weight Catalyst and Valuation • Supply forecasts continue to be adjusted downward as various factors impact expectations (cost inflati
Slide 26: Oil & Gas
Oil & Gas Key Positions • For personal use only Share prices reflecting significant pull back in energy prices with most equities inferring crude price ~$60. Company Weight Catalyst and Valuation • Unrealistic expectations regarding ability of OPEC to increase supply. • Announced major buyback in Ma
Slide 27: Uranium
Uranium Key Positions • Our fundamental thesis remains unchanged – there is not enough For personal use only Company Weight Catalyst and Valuation uranium to supply the current global nuclear fleet. • Will continue to grow strategic exposure to rare • Due to the tightening supply deficit, we are wit
Slide 28: Carbon Credits
Carbon Credits • Have developed a diverse portfolio of high quality, high impact nature- For personal use only based carbon credits via Tribeca’s proprietary relationships. Voluntary Carbon Market Pricing $25 • Our portfolio is exposed to a diverse portfolio of high-quality REDD+ and REDD+ Reforesta
Slide 29: Appendix: TGF Strategy Overview
For personal use only Appendix: TGF Strategy Overview
Slide 30: 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 31: 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 32: 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 33: 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. positioning across key
Slide 34: 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 35: 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 36: 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 37: 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 38: 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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