Queen's Road Capital Investment Ltd. · TSX:QRC
Queen's Road Capital Investment — Investor Presentation (March 2024)
19 slides from Queen's Road Capital Investment's investor presentation, March 2024
Slide 1: Leading Financier to the Global Resource Sector – Corporate Presentation
QUEEN’S ROAD CAPITAL INVESTMENT LTD. (TSX: QRC) Leading Financier to the Global Resource Sector Corporate Presentation March 2024
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: QRC – At A Glance
QRC – At A Glance • Leading source of investment capital to resource companies • Focuses on investment structures which, where possible, limit downside and retain upside • Preference for convertible debenture structures • Income during life of debenture through interest payment • Downside protected
Slide 4: QRC – At A Glance
QRC – At A Glance Ticker: QRC.TO Substantial Shareholders (> 1%) Share Price: C$0.84 52-Week High/Low: C$0.94/C$0.61 Corom Pty Ltd (Jack Cowin) 28.0% Avg. Daily Volume 86,104 shares BBRC International Pte Ltd (Brett Blundy) 15.8% Market Cap: C$383 million Warren Gilman (Chairman & CEO) 9.6% Institut
Slide 5: Leadership Team
Leadership Team Management Team Independent Directors Warren Gilman (Chairman & CEO) Michael Cowin • Mining Engineer • Principal at Corom Funds Management (family office for • 26 years at CIBC running mining investment banking in the Cowin Family) Canada, Australia and Hong Kong • 20 years as a fund
Slide 6: Supportive Shareholder Base
Supportive Shareholder Base Corom Pty Ltd. is an BBRC International Pte Ltd. is an Warren Gilman, High Net Worth investment vehicle owned and investment vehicle owned and Chairman & CEO, owns investors in Australia, controlled by Jack Cowin, a controlled by Brett Blundy, an 9.6% of QRC; all New Zeal
Slide 7: Investment Philosophy
Investment Philosophy Objectives QRC invests in public and privately held companies, primarily in the natural resource sector, with the objective of increasing shareholder return while seeking to preserve capital and limit downside risk by focusing on opportunities with attractive risk to reward pro
Slide 8: Shareholder Returns
Shareholder Returns • Since its inception, QRC has returned excess cash operating profits to shareholders in the form of dividends and share buybacks. Year 1 Year 2 Year 3 2021 2022 2023 Declared Dividend Per Share C$0.015 C$0.017 C$0.019 Dividend Yield at Announcement 2.0% 2.7% 2.9% Total Dividend
Slide 9: 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 10: The Convert Model
The Convert Model • Investments in convertible 100% Equity debentures offer: Investment • Downside protected as debt structure ranks ahead of Underlying Equity Share Price 50/50 Equity shareholders / Convert • Full equity upside above the conversion price • Income regardless of macro / 100% Downside
Slide 11: 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 12: Investment Portfolio
Investment Portfolio US$70,000,000 9.0% Convertible Debenture US$30,000,000 10.0% US$10,000,000 ($6.76 conversion; 09/28 term) Convertible Debenture 9.1% Convertible ($1.90 conversion; 12/28 Debenture 10,675,128 Shares Equity Investment term) (C$0.88-$4.33 conversion; 08/25- Gold Royalty is one of t
Slide 13: Investment Portfolio
Investment Portfolio Current Portfolio NAV Distribution Current Portfolio NAV Distribution (By Investment Type) (By Commodity) Cash Cash Copper Convertibles: 2% 1% 5% Black Scholes Gold 17% Equity 11% Investments 30% Convertibles: In The Money Royalties 9% 13% Uranium 64% Silver 6% Convertibles: Pri
Slide 14: Market Value of Investments
Market Value of Investments • Management’s Estimated Value of Investments at February 1, 2024. NXE 9.0% Coupon Convert NXE.TO Equity GROY 10.0% Coupon Convert ISO.V (All) 8.5-10.0% Coupon Convert CTGO 9.0% Coupon Convert LA.V (All) 8.0% Coupon Convert CEL.AX 9.0% Coupon Convert Other EquityEquity $0
Slide 15: Financial Performance
Financial Performance Revenue (Interest Income + Est. Fees) Net Income (Revenue less Operating Costs) $16.0 $12.0 $14.0 $10.0 $12.0 $8.0 $10.0 $8.0 $6.0 $6.0 $4.0 $4.0 $2.0 $2.0 $0.0 $0.0 CY 2020 CY 2021 CY 2022 CY 2023 CY 2024E CY 2020 CY 2021 CY 2022 CY 2023 CY 2024E Declared Dividend Net Asset Va
Slide 16: Price / NAV Multiple (x)
16 NAV / Share (CAD) $0.30 $0.40 $0.50 $0.60 $0.70 $0.80 $0.90 $1.00 $1.10 Feb 20 Mar 20 Apr 20 May 20 Jun 20 Jul 20 Aug 20 Net Asset Value Sep 20 Oct 20 Nov 20 Dec 20 Jan 21 Feb 21 Mar 21 Apr 21 May 21 Jun 21 New Investments Jul 21 Aug 21 Sep 21 Oct 21 Nov 21 Dec 21 Jan 22 Feb 22 Mar 22 Apr 22 May
Slide 17: Public Market Valuation
Public Market Valuation • QRC remains undervalued compared to its peers on a number of different metrics. Dividend Yield x Adjusted OCF Multiple x Cash Operating Margin Cash Operating Margin 2.5% 25 QRC Undervalued Overvalued 2.0% 20 OR ALS TFPM 1.5% SAND 15 TFPM ALS 1.0% QRC OR 10 0.5% Overvalued S
Slide 18: Investment Highlights
Investment Highlights • DON’T LOSE SHAREHOLDERS MONEY • We LIMIT downside risk by investing in convertible DEBT securities • PAY AN ANNUAL DIVIDEND • We do so every year and plan to grow it every year • QUALITY ASSETS IN SAFE JURISDICTIONS • We scour the world for the best orebodies in any commodity
Slide 19: Thank You!
QUEEN’S ROAD CAPITAL INVESTMENT LTD. (TSX: QRC) Thank You!
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