LION SELECTION GROUP LIMITED. — AGM Information 2024

Nov 27, 2024

LSX

Annual General Meeting November 2024

www.lionselection.com.au

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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Highest Growth Sector of the Market

Value creation opportunity

• Discovery / project expansion

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• De-risking

• Cyclical re-rating

• M&A

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Micro-Capitalisation Resources Lion’s investing focus

Many investors are seriously disadvantaged by typical risks:

Lion has a natural advantage to overcome each of these risks:

• Understanding technical information

• Specialist team – mining knowledge

• Ongoing funding

• Well funded

• Cyclical sensitivity

• Aligns investment and divestment to cycle

• People

• Huge networks

• •

• Only seeing a small portion of High volume deal flow opportunities in a huge space

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Cycle Timing: Crucial Central to Lion investment strategy

• Characteristic market patterns define cycles for resources stocks

• Cyclic volatility is particularly pronounced for micro-capitalisation stocks • Lion aligns investment behaviours to the cycle

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Cyclical awareness – buy low / sell high

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ASX100
Industrials
+19%
ASX100
Resources
-12%
Micro
Resources
-73%
Jan 2022 – Present , rebased to 19 April 2022
19 April 2022
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• The proxy for price of Micro-capitalisation Resources companies is the Median Performance of a group of 608 ASX listed companies with GICS classification Metals & Mining, that were capitalised at less than A$100M on 1 December 2023 Source: IRESS data, Lion Selection Group

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Long Term Fundamentals Commodities versus Equities

1. Expected rotation of the long-term Commodities / Equities ratio back to commodities

Historically, this has created the most substantial mining booms

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booms
Gulf War
Oil embargo 2008 Chinese Induced
Commodity peaks
1987
FAANG /
Magnificent
Seven ?
Dot Com
1972 Nifty Fifty
Commodities expensive
GSCI / S&P500
General equities expensive
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Chart shows the Goldman Sachs Commodity Index Divided by the S&P500 Index, to provide a long term ratio of commodities to equities

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Commodities VS Equities How will history describe the present…?

1. Expected rotation of the long-term Commodities / Equities ratio back to commodities

Historically, this has created the most substantial mining booms

Probably as “under-prepared”

2. Coincidence of strong commodity fundamentals

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Gulf War
2008 Chinese Induced
Oil embargo
Commodity peaks
1987
FAANG /
Magnificent
Seven ?
1972 Nifty Fifty Dot Com
Commodities expensive
GSCI / S&P500
General equities expensive
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• The mining industry is extremely under invested in future supply

Strong Chinese and BRIC nation gold appetite

Future demand patterns will reflect greater intensity of use for many critical / strategic materials under the Energy Transition

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3. Cyclical recovery: the next mining boom

4. Recovery of market appetite for risk and micro-caps

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Risk appetite connected to interest rates
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Chart shows the Goldman Sachs Commodity Index Divided by the S&P500 Index, to provide a long term ratio of commodities to equities

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Commodities

Degrees of difficulty

• Process risk

• Off-site capex requirements for transport infrastructure

• Transparency / liquidity of the commodity market

Lion targets low risk commodities:

Precious and base metals, strategic materials

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Diamonds Hard to find & Diamond mafia
Mineral Sands, Industrial Minerals,
Technically complex
Nickel / Cobalt laterites, Graphite
Complex / hazardous
PGM’s, REE’s, Uranium
products, difficult marketing
Phosphate, Potash
Massive infrastructure
& marketing
Bulks: Iron Ore, Coal
Lithium
Mixed Base Metals: Pb/Zn/Cu/Ag/Co
Increasing complexity
chemistry & marketing
Nickel Sulphides
Copper/Copper-Gold
Gold Simple extraction, no marketing
Time & $
Difficulty
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Commodities

When the sky is the limit, and when it isn’t

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Gold:

• One of the best performing assets over multi-decades

• Priced influenced more by buyer urgency than value in use

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Copper:

• Bellwether of the global economy

• Price practically constrained by what users are prepared to pay / can pass on

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Source: IRESS data, Lion Selection Group

ASX:LSX

Lion Investing Process

Deal Flow

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• Listed and unlisted

• companies

• 1,000+ to assess and filter

People

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• Competence

• • Integrity

Valuation

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Key assessment:

• Funding (dilution of per share value)

• • Geological upside

Risk assessment

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• Identify and avoid existential risks

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Lion investing strategy How is it going…?

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$43.3M value at
$27.0M invested in
31 Oct 2024 [1]
Lion’s Australian
Focussed New Saturn
Investment
Portfolio [1]
Brightstar
Antipa
Critica BoulderGreat Sunshine Plutonic Koonenberry Alto Lion’s Australian Focussed
New Investment Portfolio
is up
61% [1]
on funds invested
Contribution to portfolio value (above / below $ invested)
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Investing at cyclical low prices $50.4M cash to invest[2]

Pre-discovery Definition Assessment Development Production Precious, base and Pre-development Australia focus strategic materials stage Brightstar Resources Low capex, cash flow funds growth, strategically sized gold inventory [ASX:BTR] Underpins greatest value growth potential Saturn Metals Low-cost heap leach economics x large gold inventory [ASX:STN] Antipa Minerals Telfer region strategic resource [ASX:AZY] Sunshine Metals High grade Gold / Copper / Zinc VMS [ASX:SHN] Alto Metals Strategic ground package, 0.8Moz in shallow drilling Antipa Plutonic [ASX:AME] Great Boulder Defining the Eastern limb of the Meekatharra Gold Field Sunshine [ASX:GBR] Great Boulder Brightstar Koonenberry Critica Large, shallow, high grade REE discovery close to proposed upgrade facilities [ASX:CRI] Alto Saturn Koonenberry Gold Portfolio of exploration assets across NSW Critica [ASX:KNB] Plutonic Large, undrilled hydrothermal system with gold / copper pregnancy [unlisted] Commodity legend: Precious metals Base metals Strategic materials

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Legacy investments (Erdene, PhosCo, Atlantic Tin, Kin Gin) not shown

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Valuation [2]
Sum of the parts
ASX:LSX
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||||
|---|---|---|
|31 October 2024|
|Cash|$50.4M|35.7cps|
|Legacy Investments|$13.3M|
|39.7cps|
|New Investments|[ *]|$42.8M|
|Tax|-$2.2M|
|Total Value|$104.2M|73.8cps|
|Market Capitalisation|$82.3M|58.5cps|

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The New Investment pool consists of investments made by Lion, with a focus on Australia, since the exit of two substantial Indonesian gold investments in 2021 and 2022

• $27.0M invested in New Investments

• This pool of New Investments has performed +61%

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• New investments are companies invested in by Lion for the first time after 1 January 2022

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Valuation [2]
Sum of the parts
ASX:LSX
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NTA
(monthly)
On market buy back
Share
Nusantara
takeover 3.5c 2c Price
1.5c (daily)
1c
Pani sale Pani sale Dividends
announced completed
Pani arbitration
initiated
2021 2022 2023 2024
✓ Large exits at top of the market (2021/2022)
✓ Material reduction in jurisdiction risk
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Valuation [2]
Sum of the parts
But wait – there’s more
ASX:LSX
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Breaking down Lion’s value per share

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STN
BTR
Legend:
Australian
Investments
Legacy
Investments
Cash
Value of Lion at market price
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Investing in high growth Resources via Lion

Investing in a deeply discounted market 1.

Micro-capitalisation Resources fell heavily 2022-2024

5.

Research driven process

In house due diligence, underpinned by deep experience and broad networks

2.

Targeting highest growth sector

Micro-capitalisation Resources: multiples upside Targeted investments made from high volume deal flow

6.

Broad opportunity access

High quality deal flow from start-up stage explorers and deal makers eg Plutonic (Lion $4.8M invested) High proportion of deal flow internally originated

Well-funded

3.

$50.4M[2] cash to establish high % holdings in target investments at cyclical low prices

7.

Lowest jurisdiction risk

Australia

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4.

Entry price < asset backing

58.5cps VS 73.8cps[2] . Deeply liquid asset backing

8.

Portfolio approach to high growth sector

Multiple commodity and project exposures to minimise individual exposure risks

Specialist Mining Investment Team

9.

Established performance track record across multiple cycles, hands on approach, experienced across mining, finance and M&A plugged into the mining investment sector

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ASX:LSX

LSX:ASX

Lion Selection Group | Well funded | Investing at cyclical low Powerful contrarian play in a weakened market

Subscribe for Lion Announcements

Level 2/175 Flinders Lane Melbourne VIC 3000

T +61 3 9614 8008

E info@lsg.com.au

http://www.lionselection.com.au

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Appendices
References
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1. Refer to Lion Selection Group announcement to ASX on 25 November 2024

2. Refer to Lion Selection Group announcement to ASX on 7 November 2024

3.

• Total Shareholder Return (TSR) for Lion Selection Group as at 31 October 2024 since inception in July 1997 was 8.8%pa , versus the ASX Small Resources Accumulation Index 4.6%pa

Investment performance figures reflect the historic performance of Lion Selection Group Limited (ASX:LSG, 1997–2007), Lion Selection Limited (ASX:LST, 2007-2009), Lion Selection Group Limited (NSX:LGP, 20092013) and Lion Selection Group Limited (ASX:LSX, 2013-present).

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Methodology for calculating total shareholder return is based on MorningStar (2006), which assumes reinvestment of distributions.

Lion assume all distributions are reinvested, with all non-cash distributions sold and the proceeds reinvested on the distribution pay date.

Investment performance is pre-tax and ignores the potential value of franking credits on dividends that were partially or fully franked.

Past performance is not a guide to future performance.

Indices used for comparison are accumulation indices, which assume reinvestment of dividends.

Data source: IRESS, Lion Manager

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ASX:LSX

Founded in 1997 by Robin Widdup, Lion Selection Group has built a track record as a successful investor in mining assets and interpreter of the cycles of mining.

In a 27-year history, Lion has been an early shareholder and contributed to the success of a long list of successful mining companies. These include East African Gold Mines (The North Mara Mine which is now a substantial gold producer for Barrick in Tanzania), Consolidated Minerals, Independence Group (now known as IGO), Catalpa Resources (now known as Evolution Mining), MPI Mines, Redback Mining, Gallery Gold, EganStreet Resources, Indophil Resources and Platmin. Profitable exits have enabled Lion to make distributions to shareholders exceeding 341cps[3] which underpin Total Shareholder Return since 1997 well exceeding the ASX Small Resources Index[3] .

In 2021 / 2022 Lion exited two substantial Indonesian gold investments which resulted in a cash return to Lion of over $90M at the top of the mining cycle. $16.7M of this cash was distributed via dividends and an on-market buy-back, the remainder is available for investing in a market that has more than halved. Lion is strongly re-capitalised for a new mining boom cycle.

Lion closely monitors the mining cycle via the Lion Mining Clock and aims to align investments and exits with mining busts and booms to take best advantage of weak markets to invest and strong markets to sell.

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Lion has always backed people whose competency and integrity are high and aligned with our own.

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Our sole focus is developing a commodity diverse portfolio of pre-production Australian mining assets that have strong investment cases. This positions Lion as a mid-tier sized mining house of the future, with high leverage to the long term strongly positive fundamentals for mineral commodities and the inevitable next mining boom, based on assets that have been accumulated through the current weak market.

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Deal Flow

Extremely broad access to opportunities

Micro Capitalisation Resources

• Deep but inefficient target market

• 000’s of companies, with high creation / turnover rate

Huge investment universe

Delivered by networks

Internally originated

Watchlist

Process

• LISTED: Metals and Mining classified micro-caps largest group on ASX. >600 (of >1900 listed companies)[*]

• UNLISTED: Large community of startup, explorers and deal makers

• Extensive relationship network throughout the industry

• Results in high in-bound volume of enquiry from brokers, companies, etc

• Bottom-up investment approach: We know what we are looking and watching for

• And establish / maintain contact

• Deal flow is actively processed: watch / pursue, wait, or ignore

• Watchlist companies have detailed assessment in place

• Highly selective conversion to investment

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• Source: ASX

• High deal flow (1,000’s per year)

Investment Process 27 years of deployment

Highly selective

• Highly selective conversion to investment (targeting 10-20 portfolio stocks)

• 100% in-house due diligence, specialist mining investment team

• Growth target: Multiples

Micro Capitalisation Resources

• Highest growth stage in mining

• Requires strong technical approach and alignment to the mining cycle

• To capture high multiple growth

Portfolio objectives

Filter

Jurisdiction

People

Project

• Long term holdings, with strong follow on

• Risk management via exposure to multiple commodities, projects, stage of project and people

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• Jurisdiction / People / Project

• Australia only

• High capability, strong integrity

• Extension / part of the Lion Team

• Valuation

• Risk assessment

• Exit Consolidate or sell

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Investment Objective Multiples

Micro

Capitalisation Resources

• Target multiples that aren’t threatened by a terminal risk

• And people that are as much on our team as we are on theirs

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Risk
Valuation
Avoid high
Multiples on probability,
price available terminal
outcomes
People
Highly Capable &
Sincere
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Leverage to most attractive High capability, growthcommodities oriented teams Essential to be able to produce and sell a Oriented toward long-term relationships

Essential to be able to produce and sell a product

Cents in the dollar pricing Developing portfolio at cyclical lows

Strategically located assets Multiple pathways to development and exit

Targeting aggressive investment deployment during cyclical low periods

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LSX
Assembling a portfolio of
high-quality resources
investments
At cyclical low pricing
Preparing for the next
mining boom
ASX:LSX
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Opportunity

(well-funded to acquire multiple, high % holdings)

Asset portfolio development

Potential for outperformance

(strong re-rating expectation)

• Small and micro-cap resources companies have been depressed by small cap sentiment and commodity price weakness

• Lion has a strong cash position from top-of-market investment exits and is investing at deeply discounted cyclical lows

• Highly selective investor in a huge investment universe where specialist mining investment approach is required

• Targeting the most attractive commodities: precious, base and strategic materials

• Strategically located assets, with multiple pathways to development and exit

• Investing aligned with the mining cycle, awaiting the next boom and cyclical uplift

• Exceptional long-term fundamentals for commodities

• Overdue reversal of equity market sentiment to microand small-cap companies

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Board & Management
Strong Foundation
MANAGEMENT TEAM
BOARD
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Peter Maloney

Chris Melloy

Robin Widdup

Executive Chairman

Non-Executive Director

Non-Executive Director

Peter has commercial Chris is a mining Robin’s mining background developed engineer with 40+ experience spans through various roles years experience in Africa, UK and at WMC Resources, mining operations, Australia. Robin led Santos and FH securities analysis and the mining analyst Faulding. Peter was investment. He has team at JB Were and Chairman at Catalpa worked with Lion was the founder of Resources when it since inception, and Lion Selection Group. merged into Evolution held directorships of Mining Limited. several Lion investee companies.

Hedley Widdup

Managing Director 24+ years mining and investment experience. Extensive mine and resource geology experience. Noted for mining commentary including the mining cycle. Director of Erdene Resources and Plutonic Limited

Craig Smyth

Chief Financial Officer 18 years mining investment experience. Craig is a member of the Institute of Chartered Accountants of Australia with experience working for Coopers & Lybrand, Credit Suisse First Boston (London) and ANZ Investment Bank.

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Exceptional Access to People
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Plutonic Limited

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Critica Limited

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Brightstar Resources

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Antipa Minerals

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Alto Metals

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Sunshine Metals

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Great Boulder

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Koonenberry Gold

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Saturn Metals

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Vacancy…

?

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Gold: Supply VS Demand Bull markets start when annual production flattens

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18x 7x
?
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Source: IRESS DATA, USGS

Mining Investor Landscape

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Funds ETF Retail Lion Selection Group
ASX100 Resources Index
19 companies
Capitalisations >$2.4B Index Inclusion
Large Capitalisation
ASX Small Resources Index
& Liquidity
53 companies
Capitalisations $150M-$4B
• Management external to • Listed company structure
fund structure
ASX Listed Micro-Cap Resources • Management employed by
• Redeemable: underlying Lion
NO INDEX
00’s companies liquidity is critical • Provides the ability to
Capitalisations (typically) $1M-$500M • Market cycles can invest patiently and invest
influence investing counter-cyclically
behaviours
• Specialist industry
• Broad spread of knowledge, close company
management experience contact and focussed
investment management
UNLISTED Resources Companies
(Mostly Start-ups)
00’s companies
Capitalisations (typically) $1M-$50M
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Pyramid represents the number of companies in each category