Lowell Resources Funds Management Ltd · ASX:LRT
Lowell Resources Funds Management — Lowell Resources Fund — Investor Presentation (August 2020)
33 slides from Lowell Resources Funds Management's investor presentation, Aug 7, 2020
Slide 1: Lowell Resources Fund
For personal use only LOWELL RESOURCES FUND Emerging Mining & Oil and Gas ASX Listed Investment Trust August, 2020 1
Slide 2: Disclaimer
Disclaimer For personal use only Important Notice • 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 units or shares in any ju
Slide 3: Fund Summary
Fund Summary For personal use only Characteristics of the Fund Nature of Fund • Long only, no gearing fund Investee • Junior resource companies, including gold, Companies base and specialty metals, and energy. Investment • Focus on global listed and unlisted Type resources equities Distribution • 10
Slide 4: Fund Performance
Fund Performance For personal use only 120% 108.1% Total S&P/ASX Portfolio LRT Change Small ASX ASX 200 Performance in NAV per Resources Resources 100% Index to 30 June unit Index 300 Index 2020 (XSRD.ASX) 12 months +108.1% +-0.1 % -7.0% -7.7% 80% 5 years p.a. +18.7% pa +8.9% pa +10.3% pa +6.0% pa 6
Slide 5: Investment Overview & Objective
Investment Overview & Objective For personal use only Overview Lowell Resources Funds Management Ltd (“LRFM” or “The Manager”) manages the Lowell Resources Fund (ASX ticker ‘LRT’) Portfolio, and Investment has a successful track record for over 16 years The Manager operates through an Investment Obj
Slide 6: Fund Summary 30th June 2020
Fund Summary 30th June 2020 For personal use only Overview 10 year performance chart Fund size (NAV) A$33.2 m Net of operating expenses, fees, taxes and interest (to 30 June 2020, indexed at 100)1 Units on issue 27.4m units 30 June ‘20 Traded Unit 230 $0.96 Price 210 Net Asset Value per unit $1.18 A
Slide 7: Drivers of Exceptional Performance
Drivers of Exceptional Performance For personal use only Australian Small Cap Manager Performance 12 months to June 2020 Driven by StockAnalysis 120% Selection 100% LRT 108% 1 year 80% return Exceptional Performance 12 month return % pa 60% • Outperformance contribution 40% from multiple sources 20%
Slide 8: Historic Asset Allocation
Historic Asset Allocation For personal use only 100% Fertiliser Minerals Battery Minerals Nickel 80% Oil & Gas 60% Base Metals 40% Gold 20% Cash 0% September-2018 December-2018 September-2019 December-2019 March-2019 March-2020 June-2018 June-2019 June-2020 Uranium Mineral Sands Bauxite Coal Tungste
Slide 9: Investment Committee
Investment Committee Members For personal use only Stephen Mitchell Richard Morrow John Forwood Stuart Baker Investment Committee Investment Committee Chief Investment Officer Investment Committee Member Member Member Mr Forwood is a trained Mr Mitchell began his career as Mr Morrow is an equity geo
Slide 10: Stock Selection
Stock Selection For personal use only Top down focus Criteria Management • Macroeconomics Geographic location • Equity markets 1 Geological setting Resource/ Reserve magnitude • Market sectors Grade, metallurgy • Commodities 2 Stage Infrastructure and market Indicative economics • Re
Slide 11: Commodities vs Stocks
Commodities vs Stocks For personal use only Analysis 1.2 1.0 Commodities radically overvalued 0.8 0.6 Median: 0.46 0.4 0.2 Commodities radically undervalued 0.0 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 GSCI Commodity Index / Dow Jones ratio. 11 Source Incrementum AG
Slide 12: Current Gold Boom: May have only just started
Current Gold Boom: May have only just started For personal use only Gold Booms Source Incrementum AG 12
Slide 13: Fed Balance Sheet vs Small Resources
Fed Balance Sheet vs Small Resources For personal use only Analysis Analysis 300% increase in ASX junior resources index post GFC stimulus 13
Slide 14: Investments by Commodity
Investments by Commodity For personal use only Portfolio 30 June Mineral Sands 1% Bauxite Uranium 1% Fertilisers 2020 Cash 1% 0% 15% Nickel 2% Battery 4% O&G 6% Gold 58% Base Metals 12% 14
Slide 15: Portfolio Characteristics
Portfolio Characteristics For personal use only PORTFOLIO GEOGRAPHY BY MAIN PROJECT 30 JUNE 2020 Asia/Pacific, North 1% America, 6% Cash, 15% Europe, 2% INVESTMENT LISTING 30 JUNE 2020 Africa, 14% North America Unlisted London Cash 7% 3% 0% 15% Latin America, 9% Australia, 53% ASX 75% 15
Slide 16: LRT Uncorrelated
LRT Uncorrelated For personal use only Analysis ASX Small Ordinaries vs ASX 200 Indices Takeouts FY2019-20 300% • LRT performance 250% LRT ASX unit clearly due to stock price selection 200% • A passive allocation to Small Caps is giving 150% little diversification • Manager selection is 100% critica
Slide 17: Portfolio X-ray
Portfolio X-ray For personal use only Portfolio % of Stock % of Market Cap # of stocks # of stocks portfolio Weight portfolio $1b+ 1 12% > 10% 3 42% $350m - $1b 0 0% 5% - 10% 1 6% $100m - $350m 3 20% 1.0% - 5% 20 41% $10m - $100m 37 49% < 1.0% 31 11% < $10m 14 4% Cash 15% 17
Slide 18: Contributors to performance
Contributors to performance For personal use only Portfolio 12 Months ASX Code Positive Contribution % DEG De Grey Mining 47% MGV Musgrave Minerals 22% PDI Predictive Discovery 15% ADT Adriatic Metals 11% CDV Cardinal Resources 6% CTM Centaurus Metals 5% GOR Gold Road Resources 2% OKU Oklo Resources
Slide 19: Application in Portfolio
Application in Equities allocation For personal use only Portfolio Core Manager 2 Core Manager 3 Lowell Resources Fund (LRT.ASX) Core Manager 1 Small Caps • There is a compelling case for Lowell Resources Fund to be in an equities portfolio (Australian or Global), as one of the small cap manager all
Slide 20: Case Study: Adriatic Metals
Case Study: Adriatic Metals For personal use only Companies Adriatic Metals Plc $2.00 LRF Exits Adriatic Metals Plc (ASX:ADT) $1.80 First mover mineral explorer in $1.60 Bosnia staked the Vares/Rupice historic Zn-Ba mine $1.40 Discovered and defined the Share Price AUD$/sh Rupice polymetallic de
Slide 21: Case Study: De Grey Mining
Case Study: De Grey Mining For personal use only Companies De Grey Mining De Grey Mining (ASX:DEG) $1.00 $0.90 Gold explorer with a huge land position over the Mallina Shear $0.80 LRF Investments Zone in the Pilbara, WA $0.70 $0.60 Gold Resource of 2.2 Moz A$/sh $0.50 New Hemi discovery with m
Slide 22: Case Study: Andromeda Metals
Case Study: Andromeda Metals For personal use only Portfolio 0.08 LRF exits investment Andromeda Metals 0.07 (ASX:ADN) 0.06 Boutique kaolin project developer, focused on the 0.05 Poochera halloysite clay JV (earning 75%), located on the 0.04 Eyre Peninsula, in South Australia 0.03 LRF’s investme
Slide 23: Case Study: Syrah Resources
Case Study: Syrah Resources For personal use only Portfolio Syrah Resources 7.00 LRF exits investment Limited (ASX: SYR) 6.00 Australian-based industrial 5.00 minerals and technology company, with a focus on 4.00 graphite in Mozambique 3.00 LRF’s first investment in SYR LRF initial investment wa
Slide 24: Case Study: Kidman Resources
Case Study: Kidman Resources For personal use only Portfolio Kidman Resources Limited (ASX: KDR) 2.50 Fast-growing Australian resource company, focused on gold and 2.00 lithium, located near Southern LRF Exits Cross, in the Archaean 1.50 Forrestania belt of Western Australia LRF increases exposure
Slide 25: Significant Performers
SIGNIFICANT PERFORMERS For personal use only • $0.7m invested at average entry price of A$0.077/sh. Musgrave • • Share price June 2020 A$0.42/sh. 100% existing resources of 613koz @ 3.0g/t Au at Cue, WA Minerals • • 100% bonanza grade new shall zone identified of 18m @ 179.4g/t Separate Evolution $1
Slide 26: Portfolio by Company
Portfolio by Company For personal use only LRF Portfolio by Value 30 June 2020 $5.0 $4.5 $4.0 $3.5 $3.0 A$ Millions $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 26
Slide 27: LRF Portfolio by Project Stage
LRF Portfolio by Project Stage For personal use only LRF Portfolio Value by Stage of Project 30 June 2020 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Grass Roots Exploration & Feasibility Pre-development Development Production Cash Resource 27
Slide 28: Investing in resource equities
Investing in resource equities For personal use only Capitalising on value accretion: optimal stage Full Production LRF Target Investment Stage Initial Production Reserve Financing Discovery Drilling Exploration Leverage: milestone investing “value accretion model” LRF focus is on the period fro
Slide 29: Lowell – a unique investment opportunity
Lowell – a unique investment opportunity For personal use only 01 Fund Focus • One of the few investment funds that offers exposure to the junior resources sector across Australia and global stock exchanges in unlisted and listed companies 01 02 02 Successful track record for 10+ years • Superior pe
Slide 30: Fees
Fees For personal use only Management Fee Where Total Gross Calculated and accrues daily and is Investments are equal to or less than $50 million: payable from the Fund to the Responsible The higher of: Entity (and proportionately on-paid to the a) $25,625 per month plus 0.627% per annum of the Inve
Slide 31: Fund Organisation
Fund Organisation For personal use only The Manager: Lowell Resources The Responsible Entity: Cremorne Funds Management Ltd Capital Ltd Stephen Mitchell, Chairman Michael Ramsden, Chairman • Mr Ramsden is qualified lawyer with more than 20 years experience as a corporate adviser, Richard Morrow, Dir
Slide 32: Our Investment Process
Our Investment Process For personal use only Organisation Due Deal Monitoring Investment Disposal: Existing Diligence: Structuring: and Additional Committee On-market / Network In-house Placement/I Reporting: Investment Approval Trade Sale expertise PO/ on- Up to weekly market LRFM prefers to keep
Slide 33: Contact
Contact For personal use only Investment Responsible Entity Manager LOWELL RESOURCES CREMORNE CAPITAL LIMITED FUNDS MANAGEMENT ACN 006 769 982 ACN 006 844 588 AFSL 345674 AFSL 241175 Address Level 6, 412 Collins Street, Address Melbourne VIC 3000 8 Chapel Street, Tel: (03) 9642 0655 Richmond VIC 312
Lowell Resources Fund — Investor Presentation (August 2020) on 6ix