Lowell Resources Funds Management Ltd · ASX:LRT
Lowell Resources Funds Management — Lowell Resources Fund — Investor Presentation (March 2021)
46 slides from Lowell Resources Funds Management's investor presentation, Mar 16, 2021
Slide 1: Lowell Resources Fund Unitholder Presentation
For personal use only AFSL 345674 LOWELL RESOURCES FUND A.R.S.N. 093 363 896 ASX:LRT Unitholder Presentation March, 2021 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 28th Feb 2021
Fund Summary 28th Feb 2021 For personal use only Overview Performance chart Fund size (NAV) A$44.6 m 300 Net of operating expenses, fees, taxes and interest (to 28 February 2020, indexed at 100)1 Units on issue 28.05m units 28 Feb ‘21 Traded Unit $1.29 Price 250 Net Asset Value per unit $1.59 Ave Li
Slide 4: 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 5: Investing in resource equities
Investing in resource equities For personal use only Capitalising on value accretion: optimal stage Full LRF Target Production Investment Stage Initial Production Reserve Financing Discovery Drilling Exploration Leverage: milestone investing “value accretion model” LRF focus is on the period fro
Slide 6: Investment Committee
Investment Committee Members For personal use only John Forwood, Richard Morrow, Stephen Mitchell, Stuart Baker, Investment Chief Investment Officer Investment Committee Investment Committee Committee Member Member Member Mr Forwood is a trained Mr Baker has a strong local geologist and lawyer, with
Slide 7: Fund Performance
Fund Performance For personal use only 180% S&P/ASX Total Portfolio LRT Change Small ASX 160% Performance in NAV per Resources Resources ASX 200 Index to 28 February unit inc Index 300 Index 2021 distributions 140% (XSRD.ASX) 12 months +164.8% +34.3% +33.2% +6.5% 120% 5 years p.a. +28.1% pa +15.3% p
Slide 8: CY 2020 Exceptional Performance
CY 2020 Exceptional Performance For personal use only 180% $11,000m Share Price Return (LHS) 160% Analysis $10,000m Market Cap (RHS) 140% LRT unit price return $9,000m CY 2020: 157% 120% $8,000m 100% $7,000m 80% $6,000m 60% $5,000m 40% $4,000m 20% $3,000m 0% $2,000m -20% $1,000m -40% $0m PMC AMH MXT
Slide 9: LRT Unit Price History
LRT Unit Price History For personal use only LRT vs XSRD LRT.ASX A$/unit $1.60 $1.40 $1.20 $1.00 $0.80 $0.60 $0.40 $0.20 $0.00 9
Slide 10: Historic Asset Allocation
Historic Asset Allocation For personal use only Fertiliser Minerals Battery Minerals Nickel Oil & Gas Base Metals Gold & Silver Cash May-17 May-18 May-19 May-20 Nov-16 Nov-17 Nov-18 Nov-19 Nov-20 Uranium Mineral Sands Bauxite Coal Tungsten Helium Vanadium 10
Slide 11: Our Investment Process
Our Investment Process For personal use only Organisation Due Deal Monitoring Investment Disposal: Existing Diligence: Structuring: and Additional Committee On-market / Network In-house Placement/I Reporting: Investment Approval Trade Sale expertise PO/ on- Up to weekly market LRFM prefers to keep
Slide 12: Stock Selection
Stock Selection For personal use only Top down focus Criteria Management • Macroeconomics Geographic location • Equity markets 1 Geological setting Resource/ Reserve magnitude • Market sectors Grade, metallurgy • Commodities 2 Stage Infrastructure and market Indicative economics • Re
Slide 13: Commodities vs Stocks
Commodities vs Stocks For personal use only Analysis 13
Slide 14: Commodity Prices
Commodity Prices For personal use only COKING COAL GOLD (AUD) MANGANESE ORE LEAD GOLD (USD) TUNGSTEN APT EUROPE URANIUM VANADIUM PENTO (EUROPE) GRAPHITE MED FLAKE THERMAL COAL (NWC) ALUMINUM 12 Month Change to Mar 2021 PLATINUM NICKEL ZINC OIL (BRENT) NAT GAS LITHIUM CARBONATE (China) SILVER TIN COP
Slide 15: 2008 GFC: Gold and Equities
2008 GFC: Gold and Equities For personal use only Metals Figure: Small Resources Index and Gold US$/oz 1995-2011 15
Slide 16: Competing Inflationary Factors
Competing Inflationary Factors For personal use only Markets 16
Slide 17: Gold vs US Bond yields
Gold vs US 10 year Bond yields For personal use only Analysis
Slide 18: Gold vs US Dollar Index DXY
Gold vs US Dollar Index DXY For personal use only Analysis
Slide 19: Gold vs Bitcoin BTC
Gold vs Bitcoin BTC For personal use only Analysis
Slide 20: Gold vs Nasdaq Tech Index
Gold vs Nasdaq Tech Index For personal use only Analysis
Slide 21: Central Bank Gold Demand
Central Bank Gold Demand For personal use only Analysis
Slide 22: Major Gold Miners
Major Gold Miners For personal use only Analysis S&P 500 Sectors (Source Coast Capital Management) 50% Gold Mining 40% 30% Operating Margin 20% Health Care Utilities Financials Industrials Energy S&P 500 Index 10% Infotech Materials Real Estate Consumer Staples Communication Services 0% 0 10 20 30 4
Slide 23: The Green Transition
The Green Transition For personal use only The green transition is very metals intensive Mining magnates are raising funds: • Robert Friedland – Jan 2020 $240m SPAC for decarbonisation targets • Mick Davis – GBP75m Vision Blue Fund for battery metals 23
Slide 24: Copper & Nickel
Copper & Nickel: 1 Yr For personal use only Copper = disrupted mine supply, scarce stockpiles, strong demand, and lack of big new projects Tsingshan announces technology to produce battery grade Ni from NPI 24
Slide 25: Lithium
Lithium For personal use only Some Chinese lithium suppliers are running short of lithium resources, which could hinder the growth of EVs (similar to the current shortage in semiconductors). 25
Slide 26: Mining Equity Raisings
Mining Equity Raisings For personal use only Markets In the June Quarter 2020, cash inflows to the 646 exploration companies on the ASX rose by 60% to $1.34bn 26
Slide 27: Oil & Gas Sector Update
Oil & Gas Sector Update For personal use only Stuart Baker, Investment Committee Member 27
Slide 28: Oil
Oil Oil For personal use only 10.0 • Covid 19 collapsed global oil demand by 17% in 2Q 2020. Stck change + Misc to balance( MMbopd) • Reduction in supply from low oil prices, withdrawal of production from OPEC+ Russia, and a sharp recovery in demand is gradually restoring crude markets to balance 6.
Slide 29: Gas
Gas Natural Gas For personal use only $15.0 • Historically, gas markets are regional and subject to local supply, demand and transportation factors $12.0 • Strong growth in traded LNG, with demand cagr ~6.5% p.a over $9.0 the past 20 years, is forcing price convergence in many markets which were onc
Slide 30: Case Study: Liontown Resources
Case Study: Liontown Resources For personal use only Companies Liontown Resources LTR.ASX Share price $0.60 Liontown Resources Ltd (ASX:LTR) $0.50 LRF Sales • Kathleen Valley Lithium $0.40 Project:156Mt @ 1.4% Li2O spodumene and 130ppm Ta2O5 • Moora Au-PGM-Ni-Cu prospect $0.30 WA • LRT A$213k invest
Slide 31: Case Study: De Grey Mining
Case Study: De Grey Mining For personal use only Companies De Grey Mining DEG.ASX Share price $1.80 De Grey Mining $1.60 (ASX:DEG) $1.40 Gold explorer with a huge land position over the Mallina Shear $1.20 LRF Sales Zone in the Pilbara, WA $1.00 Gold Resource of 2.2 Moz New Hemi discovery with
Slide 32: Case Study: Talon Metals
Case Study: Talon Metals For personal use only Companies Talon Metals TLO.TSX Share price Talon Metals $1.00 $0.90 (TSXV:TLO) $0.80 • Earning 60% of Tamarack nickel project in Minnesota, USA. $0.70 • PEA after-tax NPV’s of over $0.60 US$500m with IRR’s of over 30% LRF Investments • 110m drill inters
Slide 33: Significant Performers
SIGNIFICANT PERFORMERS For personal use only • $0.7m invested at average entry price of A$0.077/sh. Musgrave • • Share price March 2021 A$0.32/sh. 100% existing resources of 613koz @ 3.0g/t Au at Cue, WA Minerals • • 100% bonanza grade new shall zones incl 18m @ 179.4g/t Separate Evolution $18m earn
Slide 34: Selected Unlisted Investments
SELECTED UNLISTED INVESTMENTS For personal use only • Upcoming ASX IPO • IRGS and Victorian-style gold in Tasmania: historic intersection of 73m at Flynn Gold • 1.76g/t Au Ground position on south boundary of DEG’s Hemi tenements – never drilled gold anomalies Kin-Gin • • Japan-focused gold explorer
Slide 35: Investments by Commodity
Investments by Commodity For personal use only Uranium Helium Mineral Sands Portfolio Bauxite 2% 1% 0% 0% Fertilisers 2% 28 Feb Cash 7% 2021 Nickel 12% Gold 44% Battery 1% O&G 13% Silver Base Metals 1% 17% 35
Slide 36: Portfolio Characteristics
Portfolio Characteristics For personal use only PORTFOLIO BY GEOGRAPHY OF MAIN PROJECT, 28 FEB 2021 Asia/Pacific, North Cash, 7% 2% America, 11% Africa, 11% Europe, 2% INVESTMENT LISTING 28 FEB 2021 Unlisted London Cash North America 4% 0% 7% 10% Latin America, 18% Australia, 48% ASX 79% 36
Slide 37: Portfolio X-ray
Portfolio X-ray For personal use only Portfolio 28 Feb 2021 Market Cap # of stocks % of portfolio Stock Weight # of stocks % of portfolio $1b+ 1 6% > 10% 0 0% $350m - $1b 3 9% 5% - 10%* 6 37% $100m - $350m 6 22% 1.0% - 5% 25 47% $10m - $100m 40 52% < 1.0% 30 16% < $10m 11 4% *includes cash Cash 7% N
Slide 38: Portfolio by Company February 2021
Portfolio by Company 28 February 2021 For personal use only 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 38
Slide 39: LRF Portfolio by Project Stage
LRF Portfolio by Project Stage For personal use only LRF Portfolio Value by Stage of Project 28 February 2021 60% 50% 40% 30% 20% 10% 0% Grass Roots Exploration & Feasibility Pre-development Development Production Cash Resource 39
Slide 40: LRT Unit Traded Price vs Underlying NAV cf Peers
LRT Unit Traded Price vs Underlying NAV cf Peers For personal use only 5% 0% -5% LRT Prem/ Disc -10% <$200m Prem/ Disc -15% -20% -25% -30% 40
Slide 41: 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 42: Application in Portfolio
Application in Equities allocation For personal use only Portfolio Core Manager Core Manager 2 3 Lowell Resources Fund Core Manager (LRT.ASX) 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 43: 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 44: 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 45: 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
Slide 46: Q&A
Q&A For personal use only Sign Up! Video Article Media Updates https://www.lowellresourcesfundsmanagement.com.au/contact-us.html 46
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