LION SELECTION GROUP LIMITED. — AGM Information 2019

Dec 4, 2019

LION SELECTION GROUP Annual General Meeting December 2019

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Disclaimer

• 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 shares in any jurisdiction. This presentation does not take into account any person's particular investment objectives, financial resources or other relevant circumstances and the opinions and recommendations in this presentation are not intended to represent recommendations of particular investments to particular persons. To the fullest extent permitted by law, each of Lion Selection Group Limited (Lion), Lion Manager Pty Ltd (Lion Manager), or any of its related bodies corporate, or any of its directors, officers, employees, agents, representatives and advisers do not make any representation or warranty, express or implied, as to the accuracy or completeness of any information, statements, opinions, estimates, forecasts or other representations contained in this presentation. No responsibility for any errors or omissions from this presentation arising out of negligence or otherwise is accepted.

• This presentation may include forward looking statements. Forward looking statements are only predictions and are subject to risks, uncertainties and assumptions which are inherently speculative and outside the control of Lion and Lion Manager. These risks, uncertainties and assumptions include commodity prices, currency fluctuations, economic and financial market conditions in various countries and regions, environmental risks and legislative, fiscal or regulatory developments, political risks, project delay or advancement, approvals and cost estimates. Accordingly, there can be no assurance that actual values, results or events will not vary significantly from those expressed or implied in this presentation. Lion and Lion Manager do not undertake any obligation to update or revise any information or any of the forward looking statements in this presentation for changes in events, conditions or circumstances on which any such forward looking statement is based following the date of this presentation.

• This presentation may include figures illustrating past performance. Past performance is not and should not be relied upon as a guide to future performance. Future returns are not guaranteed and a loss of original capital may occur.

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ASX : LSX | 2
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Lion Selection Group Portfolio Review

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Lion Net Tangible Assets

		% held	A$ million	¢ps	A$ million	¢ps
			Nov 2019		Nov 2018
Pani	JV	33.3	39.2	26.1	38.7	25.8	Gold

Lion Selection Group (LSX)

▪ Founded 1997

• Fair value for Pani based on Merdeka’s acquisition of 66.7% interest in the Pani JV from Lion’s former JV partner in November 2018.

Nusantara Resources	23.3	14.1	9.4	6.7	4.5	Gold
EganStreet Resources		Sold		4.2	2.8	Gold
Roxgold		Sold		4.9	3.3	Gold
Erdene Resources	5.7	2.0	1.3	2.0	1.4	Gold
Other		4.1	2.7	4.9	3.3

• Portfolio holdings measured at fair value

• Listed investment company – junior resources

• 8.0% pa TSR since inception (22 years)

Recent highlights

• Includes investments held directly by Lion and the value to Lion of investments held by African Lion

Net cash 17.6 11.7 1.4 0.9	Net cash 17.6 11.7 1.4 0.9	Net cash 17.6 11.7 1.4 0.9	Net cash 17.6 11.7 1.4 0.9	Net cash 17.6 11.7 1.4 0.9	Net cash 17.6 11.7 1.4 0.9
Total NTA A$77.0m 51¢ps A$62.8m 42¢ps
Capital Structure			Substantial Shareholders	M Shares	%
Shares on issue:	150,134,879		R. Widdup	16.16	10.8
Share price:	46¢ps	30 November 2019	Cooper Investors	11.46	7.6
Options on issue: 15,720,958 $0.50 expiry 12 April 2020 Other: Lion Directors/Management 12.81 8.1

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• Roxgold sold

▪ Toro taken over

▪ EganStreet taken over

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7 year journey…

• Pani IUP threat • Pani license secure, seeking regional consolidation

Lion Share Price Lion NTA

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Two, multi-million ounce gold projects

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Pani: Lion 33% ▪ Targeting unification of region to combine resources and unlock optimal development ▪ Drilling underway ▪ Development studies 2020

Nusantara: Lion 23%

▪ DFS in place[3] ▪ Exploration success: outside Resource / Reserve shells[5]

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Pani Looking south

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700m
IUP Boundary
Informal workings
Informal workings
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Pani Looking North

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1
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Pani Timeline

History:

2012

Pani drilling by One Asia: long gold intersections

2014 Pani Resource 2.37Moz

2017

Resolution of Pani dispute with J Resources

2018

Merdeka acquires 66% interest in Pani JV

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1960s to 90’s

Pani region initially explored by Newmont, Utah, BHP

2013

Pani ownership challenge

2015

Pani JV with Provident

2018

Lion acquires 33% Pani JV interest from One Asia

2019

Targeting unification of region to combine resources and unlock optimal development

Next Steps:

10,000m Drilling

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Updated Resource

Project Development studies

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Nusantara

Main Pit Expansion Potential[5]

Strategy: engage with strategic local partner

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• 1.1Moz Reserve [4]
Build It
•
100koz pa [3]
•
Expand Resource
Grow It
•
Review optionality
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Roxgold – SOLD

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African Lion Investing
African Lion Selling
Construction
Commences
First Gold
New Board &
Feasibility
Management
Discovery Maiden Resource:
660koz at 13g/t Au
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Roxgold Resources

High grade gold, Burkina Faso TSXV Listed (ROXG) Held by African Lion 3 (Lion 23.7%)

• C$ 16.9m invested

• C$ 25.3m proceeds

• C$ 8.5m profit

• (US$ 4.45m distribution to Lion)

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EganStreet – SOLD

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Lion Investing Lion Sale EganStreet Resources
High grade gold, Australia
▪
A$ 5.9m invested
▪
A$ 9.6m proceeds
▪
A$ 3.7m profit
▪ Incorp as Auricup 2010
▪ Lion first investment 2011
▪ Missed the IPO market 2011
& 2012
▪ New Management 2015
Silver Lake T/O bid ▪ IPO 2016
0.27 SLR / EGA
▪
T/O by Silver Lake 2019
IPO Silver Lake T/O bid
0.431 SLR / EGA
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Other investments

Gold

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Erdene
Kin-Gin
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Tin

Kasbah, Morocco – Large, development ready tin project

Phosphate

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Celamin, Tunisia

• Ownership dispute 2015

• Won international arbitration November 2017

• Local Partner March 2019

• Arbitration decision enforced in Tunis April 2019

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Mining Market Overview

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Miners – best and worst performers

Gold 2.6x ASX100 Resources Small Non-Index Resources Resource 1.9x Index 1.9x Juniors Small ASX100 Industrials 0.8x Returns: Industrials 1.2x 1.2x Jan 2016 – 100%: Present Break Even

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Who is buying miners

• The bigger the better

• • Very strong recovery in

• Production ✓ large cap miners since 2016

• •

• By exception only

• Development

• Only small quantum Exploration ½

Institutional

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Retail

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Challenges for funding of juniors

▪ Distractions

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Tech

Massive Venture Capital Inflows / Huge investment into unlisted tech

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Pot

Regulatory platform in North America / Equity market infatuation

▪ Investment market stratification

• Exchange Traded Funds (ETFs)

• Index Funds

• Royalty Companies

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Growth oriented thinking in full flight

▪ Seeing two styles of M&A:

▪ Large deals (Barrick / Randgold, Newmont / Goldcorp, Kirkland / Detour)

(not hostile, non-competitive premiums)

▪ Producers investing in / taking over juniors

(Industry cash flow the primary source of investment for progressing juniors AND shows value is compelling to established miners)

In both cases: driven by a desire for greater scale

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ASX100 Resources Index – 2011 to 2019

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Glencore IPO
US$11B Gold project purchases by ASX mid tier Gold M&A
Gold Price Rallies
Acute investor concern: Progressive
dividend policies
BHP / RIO: New
dividend policies
Winu Stavely ?
Realisation:
Fosterville
Miners have been over spending
Substantial deterioration in most mineral
commodity prices Samarco Tailings Dam Disaster
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Lion Mining Clock

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✓
✓
✓

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✓ Exploration activity increasing

• ✓ Growth oriented thinking has re-emerged

• ✓ Large acquisitions (gold)

 Canadian market holding back global sentiment – distracted by cannabis

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Notes

• 1. Refer to One Asia Resources Limited news release 3 December 2014, (https://www.lionselection.com.au/wpcontent/uploads/2018/08/PANI%20JORC%20RESOURCE.pdf).
• 1. Refer to J Resources 31 December 2018 Annual Report, (http://www.jresources.com/investors/article/final-resourcesreserves-compilation-2017-to-2018)

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• 1. Nusantara ASX Announcement, 4 October 2018, Definitive Feasibility Study Confirms Robust, Long-Life, Low Cost Project
• 1. Nusantara ASX Announcement, 13 September 2018, Ore Reserve increases by 11% to 1.1. Moz
• 1. Nusantara ASX Announcement, 9 October 2019, Exploration Update Step-out Drilling at Awak Mas

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