Queen's Road Capital Investment Ltd. · TSX:QRC
Queen's Road Capital Investment — Investor Presentation (August 2020)
20 slides from Queen's Road Capital Investment's investor presentation, August 2020
Slide 1: Queen's Road Capital Investment Ltd. – Leading Financier to the Global Resource Sector
QUEEN’S ROAD CAPITAL INVESTMENT LTD. (TSXV: QRC) Leading Financier to the Global Resource Sector August 2020
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: Queen's Road Capital (QRC)
Queen’s Road Capital (QRC) • QRC is a leading source of investment capital to resource companies and projects throughout the world • QRC focuses on investment structures which, where possible, limit downside and retain upside • Preference for convertible debenture structures • Income during life of
Slide 4: Queen's Road Capital (QRC)
Queen’s Road Capital (QRC) • QRC is managed by Warren Gilman and Alex Granger who have over 60 years of deal making and financing in the global resource sector • Directors & Officers own >9% of QRC which was acquired entirely through share purchases at an average cost of $0.35 per share • QRC’s gene
Slide 5: QRC Leadership Team
QRC Leadership Team Hong Kong Directors Overseas Directors Warren Gilman – Chairman & CEO John Anderson – Independent Director • CEO of Queen’s Road Capital Investment Ltd. • Practicing lawyer at Stikeman Elliott since • Mining engineer 1991 with a focus on public M&A • 26 years at CIBC running mini
Slide 6: Warren Gilman – CEF Track Record
Warren Gilman – CEF Track Record • Warren Gilman left CIBC in 2011 with the title of Vice Chairman & Head of Asia Pacific, responsible for all CIBC business activities in Asia • Joined CEF in 2011 & led it for the next 8 years until its closure in 2019 • CEF was owned 50% by CIBC & 50% by CK Hutchis
Slide 7: QRC Capital Structure
QRC Capital Structure • QRC is a tightly held company with 75% of the shares in the hands of three strategic investors as well as Directors & Officers. Float 14% Corom Pty Ltd Basic Shares Outstanding: 277,252,651 (Jack Cowin) 26% Options Outstanding 02/25 Expiry ($0.30) 11,000,000 Australasia High
Slide 8: QRC Capital Structure
QRC Capital Structure Corom Pty Ltd. (Jack Cowin) Tattarang Pty Ltd. (Andrew Forrest) • Corom Pty Ltd. is an investment vehicle owned and • Tattarang is one of Australia's largest private investment controlled by Mr. Jack Cowin, a Canadian-Australian groups established by the Forrest family. Dr Andr
Slide 9: QRC Share Price Performance
QRC Share Price Performance $0.90 800,000 $0.80 700,000 $0.70 600,000 Announcement of US$30m $0.60 $84 million capital raising; NexGen Investment (TSX: NXE) Halt Lifted 500,000 $0.50 400,000 $0.40 Shares halted; Announcement of 300,000 transformation from Lithion $0.30 Energy to Queen’s Road Capital
Slide 10: QRC Investment Structure
QRC Investment Structure Capital Investments Injections Investors QRC Investee (Cayman Islands) Companies (TSXV: QRC) Regular Interest Dividends & Caymans Payment Special incorporation & Hong on Converts & Dividends Kong residency Establishment supports tax Fees efficiency of investment returns
Slide 11: 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 12: The Convert Model
The Convert Model • Investments in convertible 100% Equity Investment debentures offer: • Downside protected as debt Underlying Equity Share Price structure ranks ahead of 50/50 Equity / Convert shareholders • Full equity upside above the conversion price • Income regardless of macro / Downside 100%
Slide 13: Investment in NexGen Energy Ltd.
Investment in NexGen Energy Ltd. • On May 27, 2020, QRC completed a US$30 million investment in NexGen Energy Ltd. (TSX: NXE), comprised of US$15 million in equity and US$15 million in convertible debentures with a 7.5% annual coupon • NexGen owns and operates the Arrow uranium deposit located in Sa
Slide 14: Investment in NexGen Energy Ltd.
Investment in NexGen Energy Ltd. • Key Terms of the Investment: • Purchase of 11,611,667 shares in NXE at C$1.80 per share for proceeds of US$15,000,000 • Purchase of US$15,000,000 aggregate principal amount of 7.5% unsecured convertible debentures • 7.5% interest payable semi-annually • 5.0% payabl
Slide 15: Investment in ISOEnergy Ltd.
Investment in ISOEnergy Ltd. • On July 23, 2020, QRC announced a US$6 million convertible debenture investment in ISOEnergy Ltd. (TSX-V: ISO) with a 8.5% annual coupon • ISO owns and operates the Hurricane Zone uranium discovery located in Saskatchewan, Canada; Hurricane is the most exciting uranium
Slide 16: Investment in ISOEnergy Ltd.
Investment in ISOEnergy Ltd. • Key Terms of the Investment: • Purchase of US$6,000,000 aggregate principal amount of 8.5% unsecured convertible debentures • 8.5% interest payable semi-annually • 6.0% payable in cash • 2.5% payable in common shares of ISO • Interest decreases to 7.5% upon completion
Slide 17: QRC Investment Portfolio
QRC Investment Portfolio Current Portfolio (Pro Forma ISO) Indicative Long-Term Portfolio NAV Distribution NAV Distribution 42% Equity Linked 35% Equity Linked ISO - Cash Conversion Equity Portion 5% NXE - Option of Convert Conversion 7% Investments Option Cash 25% 9% 30% ISO - Equity 0% NXE - Equit
Slide 18: QRC Investment Portfolio
QRC Investment Portfolio • QRC has already achieved healthy returns on its investment portfolio $25 Total Unrealized Return on Investment ~ 47.0% $20 (~65 days old investment) +37.5% US$ millions $15 +5.6% $10 $5 +∞% $0 NXE Equity Investment NXE Debenture Investment NXE Conversion Option Original In
Slide 19: QRC Investment Portfolio
QRC Investment Portfolio • Illustrative Cash Flow based on $100 million investment base Investment Portfolio Shareholder Return Item Weight Return Regular Dividend $4.5 million Special Dividend tbd Convertible Securities 85% 7.5% pa Equity Investments 10% nil Dividend Yield 4.5% Cash 5% 0.5% pa (on
Slide 20: Thank You!
QUEEN’S ROAD CAPITAL INVESTMENT LTD. (TSXV: QRC) Thank You!
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