Queen's Road Capital Investment Ltd. · TSX:QRC
Queen's Road Capital Investment — Investor Presentation (April 2023)
26 slides from Queen's Road Capital Investment's investor presentation, April 2023
Slide 1: Leading Financier to the Global Resource Sector
QUEEN’S ROAD CAPITAL INVESTMENT LTD. (TSX: QRC) Leading Financier to the Global Resource Sector April 2023
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 ~10% of QRC which was acquired entirely through share purchases • QRC’s general investment criteria: • Commodity
Slide 5: QRC Leadership Team
QRC Leadership Team Hong Kong Directors Overseas Director Warren Gilman – Chairman & CEO Michael Cowin – Independent Director • CEO of Queen’s Road Capital Investment Ltd. • Principal at Corom Funds Management • Mining engineer (family office for the Cowin Family) • 26 years at CIBC running mining i
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. Retail Corporates 9% Corom Pty Ltd Basic Shares Outstanding: 451,331,552 3% (Jack Cowin) Institutions 25% Options Outstanding 6% 02/25 Expiry (C$0.3
Slide 8: QRC Capital Structure
QRC Capital Structure Corom Pty Ltd. (Jack Cowin) Wyloo Metals 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 Andre
Slide 9: QRC Share Price Performance
QRC Share Price Performance $0.90 2,000,000 US$20m (NYSE: US$4m C$0.015 (TSXV: ISO) 1,800,000 $0.85 CTGO) Dividend US$5m 1,600,000 $0.80 US$5m (TSXV: LA) (TSXV: LA) 1,400,000 $0.75 1,200,000 $0.70 1,000,000 C$100m 800,000 $0.65 Raising TSX US$15m US$4m Listing (ASX: CEL) 600,000 $0.60 (TSXV: LA) C$2
Slide 10: QRC Investment Structure
QRC Investment Structure Capital Investments Injections Investors QRC Investee (Cayman Islands) Companies (TSX: QRC) Regular Interest Dividends & Caymans Payment Special incorporation & Hong on Converts & Dividends Kong residency Establishment supports tax Fees efficiency of investment returns 10
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: 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 14: Dividend Paying Company
Dividend Paying Company • QRC returns all excess operating income to investors through annual dividends • Strong shareholder participation in the Dividend Reinvestment Plan (DRIP) – a testament of investors’ appreciation for QRC’s business model and growth prospects • DRIP funds used to repurchase s
Slide 15: Investment Portfolio
Investment Portfolio NexGen is a uranium development company that owns & operates the Arrow uranium deposit located in Saskatchewan, Canada. Arrow is the world’s largest to-be-developed high-grade uranium deposit with a indicated mineral Ticker Share Price resource estimate of 179.5 mlbs U3O8 gradin
Slide 16: Investment Portfolio
Investment Portfolio IsoEnergy is a uranium development company that owns & operates the Hurricane uranium discovery located in Saskatchewan, Canada. Hurricane is the most exciting uranium discovery in the Athabasca basin since Arrow was Ticker Share Price discovered in 2014 with a indicated mineral
Slide 17: Investment Portfolio
Investment Portfolio Adriatic Metals is a silver-zinc development company that is developing the 100%-owned Vares project located in Bosnia & Herzegovina. Vares is a high- grade silver rich (~50% of revenue from precious metals) deposit located Ticker Share Price near surface in a historical mining
Slide 18: Investment Portfolio
Investment Portfolio Los Andes is focused on developing the 100%-owned Vizcachitas copper- molybdenum porphyry project located in Chile. The Vizcachitas project is one of the largest advanced copper deposits in the Americas and is set to Ticker Share Price become Chile’s next major copper mine. The
Slide 19: Investment Portfolio
Investment Portfolio Osisiko Green is a special purpose acquisition corporation (SPAC) with the purpose of effecting an acquisition of a business involved in the shift away from fossil fuels to green energy such as the mining of battery metals. Osisko Ticker Share Price Green is led by Sean Roosen,
Slide 20: Investment Portfolio
Investment Portfolio Contango Ore is a U.S. gold development company that owns a 30% interest in Peak Gold LLC. Peak Gold LCC, operated by 70% partner Kinross Gold, is developing the Manh Choh gold deposit in Alaska. Manh Choh is anticipated Ticker Share Price to produce in excess of 1 million ounce
Slide 21: Investment Portfolio
Investment Portfolio Challenger Exploration is a gold exploration company that is advancing the 100%-owned Hualilan project located in San Juan province, Argentina. Hualilan is a historic high-grade gold district. In June 2022, Challenger Ticker Share Price released an initial resource at Hualilan c
Slide 22: Investment Portfolio
Investment Portfolio Current Portfolio NAV Distribution Current Portfolio NAV Distribution (By Investment Type) (By Commodity) Cash Other Cash Convertibles: 1% 5% Battery Metals 5% Black Scholes * 17% 8% Equity Investments 28% Copper 8% Convertibles: Uranium In The Money 45% 12% Gold 21% Convertible
Slide 23: Investment Portfolio
Investment Portfolio Cash & Equity Investments Convertible Debenture Investments $60 $50 $40 7.5% coupon 8.0% 9.5% coupon coupon 8.5-10% $30 coupon 9.0% 8.0% coupon coupon $20 $10 $0 Cash NXE.TO GOGR Other NXE.TO CTGO ADT.AX ISO.V (All) CEL.AX LA.V (All) Initial Investment / Debt Principal Current M
Slide 24: Investment Portfolio
Investment Portfolio • QRC has generated unrealized gains exceeding US$100m since its first investment in May 2020 with its NAV per share tripling over the same period. $0.90 1.6 LA LA ISO 1.4 $0.80 GOGR CTGO CEL 1.2 Price / NAV Multiple (x) $0.70 LA NAV / Share (CAD) 1.0 $0.60 0.8 ADT 0.6 $0.50 0.4
Slide 25: Peer Comparison
Peer Comparison • QRC is the only company its size that has comparable operating ratios to the mid- majors yet it trades at less than half of their valuation multiples. 100% TFPM OR SAND ALS MTA QRC ELE VOXR NOVR 10% Cash Operating Profit / Adj. Market Cap 80% 8% Cash Operating Profit Margin 60% 6%
Slide 26: Thank You!
QUEEN’S ROAD CAPITAL INVESTMENT LTD. (TSX: QRC) Thank You!
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