# LRT - Lowell Resources Fund



## System (6 February 2018)

Lowell Resources Fund is a unit trust that is focused on investing in shares and other financial products issued by predominately small cap resources companies listed or seeking to list on Australian and overseas stock exchanges.

The Fund employs an active management style to maximise absolute returns from carefully selected investments. The primary investment targets are junior Australian and overseas mining and energy companies that meet strict investment criteria. These companies will typically show evidence that they are approaching their primary growth phase, and are therefore expected to be positively re-rated by the market if they meet these objectives.

It is anticipated that LRT will list on the ASX during March 2018.

http://www.cremornecapital.com/lrf-profile/


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## Dona Ferentes (15 April 2021)

since listing, LRT had an  unspectacular first two years ..... but since April 2020, both in price action and NTA (it is a LIT) the returns have been great. Latest NTA for 07 April was $1.70 so the shareprice has not kept up with stated AUM (it is selling at a discount).

Market cap is only about $50M. LRT is focused on _generating strong absolute returns from the junior resources sector. Its experienced team of fund managers has many years of experience in this high risk, high reward sector. Lowell Resources Fund Management (LRFM) manages the portfolio of exploration and development companies operating in precious and base metals, specialty metals and the oil and gas space._ 



> *Performance Comparison* In the 12 months to 31st March 2021, the Lowell Resources Fund spectacularly outperformed the benchmark, by over 170%. The S&P/ASX Small Resources Index (XSRD) return of 59.7% pa compared to the Fund’s remarkable *233.8% 12month change in underlying net asset value* per unit (inclusive of distributions and after fees and expenses.




*Top Ten  holdings*:
Lefroy Exploration (Gold) ....... 7.2%
Predictive Discovery (Gold) .... 6.8%
Musgrave Minerals (Gold) ....... 6.1%
De Grey Mining (Gold) ..............6.1%
Centaurus Metals (Nickel) ....... 5.3%
Talon Metals - TSX (Nickel) ...... 5.2%
Genesis Minerals (Gold) .......... 4.6%
Cash ........................................... 4.3%
Caravel Minerals (Copper) ....... 4.2%
Karoon Energy (Oil & Gas) ........ 3.0%

_Since inception:_


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## peter2 (13 June 2021)

*LRT* is a licensed investment trust (LIT) as must distribute their profits at the EOFY. Last years div = 0.025/share. This year their NAV has grown >100% comfortably beating the S&P/ASX Small Resources Index over the past 1yr and 5yrs. 

Their MO is similar to how I manage the Spec portfolio in that they spread their capital across a large number of mineral explorers. Here's a good pic at their current portfolio holdings. 






Their monthly reports include a few lines on their top 10 holdings. I find it a good source of information on companies I'm not familiar with.


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## Sean K (13 June 2021)

peter2 said:


> *LRT* is a licensed investment trust (LIT) as must distribute their profits at the EOFY. Last years div = 0.025/share. This year their NAV has grown >100% comfortably beating the S&P/ASX Small Resources Index over the past 1yr and 5yrs.




Thanks for raising this Peter, this is a really interesting company. Doing pretty well the past 12 months. Be worth putting all their stocks on a watch list I reckon. 

They have a very similar philosophy and strategy into buying juniors to myself, which is to get in during the early exploration/discovery side of the cycle. Gotta tap into the Lassonde Curve.


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## Sean K (13 June 2021)

Seems like they've picked well. Maybe just a good phase in the commodity cycle and what they're focussed on, but looks like a good return.


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## peter2 (13 June 2021)

IMO they've done well because of the economic conditions (right time of the cycle) and that they've spread their investments around rather than a concentrated few. I also notice in their reports that they take partial profits after price surges to new highs. This allows them to reinvest in other promising opportunities. Smart. 

I have to point out that fund managers that do very well in a short period (1 - 2yrs) *rarely* perform at the same level in following years. Many LICs stay invested in companies (married) too long, don't take profits, don't reinvest without raising more capital, believe that their outperformance is innate (ego) and not due to the economic cycle. 

Very few LICs/LITs trade at a premium to their NAV.  Wilson asset mgt being the exception (WAM, Whoop, Wow etc. )


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## finicky (22 September 2021)

Just hopped in for 5,000 @ market 1.35
Tipped off by bk1 on GMD thread - at today's GMD price LTR's investment in GMD more than doubled (GMD was 5.8% of their p/f). Besides, trading at a discount to assets and they have a few good picks.


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## finicky (24 September 2021)

Today's net asset value announcement as at Sept 22 was 1.73 (prior month was 1.66)
Yesterday's close of LRT was 1.35
The spike in GMD s.p was on Sept 22 - closed at 0.18 but retraced next day to close at 0.15
Prior to spike LRT's GMD holding was 5.8% of LRT's net asset value.


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## Sean K (24 September 2021)

finicky said:


> Today's net asset value announcement as at Sept 22 was 1.73 (prior month was 1.66)
> Yesterday's close of LRT was 1.34
> The spike in GMD s.p was on Sept 22 - closed at 0.18 but retraced next day to close at 0.15
> Prior to spike LRT's GMD holding was 5.8% of LRT's net asset value.




Wonder why it's at a discount? Maybe the market will catch up eventually or this is how things go...

Make's me think of DGO's situation where the market value of their investments are worth more than their SP.


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## finicky (24 September 2021)

Risky because of the non producing resource companies it focuses on I guess but as you'd know  not a rarity for LICs and LITs to be at a discount as Dona Ferentes has dwelled on. This one gets very little attention on forums. I bought it on impulse because of the possible s.p potential of GMD and I like a few of their other companies. Also, as shown in fy21, their dividend can be phenomenal if the spec resources have a good year - of course miserable if they don't. Not sure that I'll hold it.


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## Sean K (8 October 2021)

finicky said:


> Risky because of the non producing resource companies it focuses on I guess but as you'd know  not a rarity for LICs and LITs to be at a discount as Dona Ferentes has dwelled on. This one gets very little attention on forums. I bought it on impulse because of the possible s.p potential of GMD and I like a few of their other companies. Also, as shown in fy21, their dividend can be phenomenal if the spec resources have a good year - of course miserable if they don't. Not sure that I'll hold it.




Picked this at the right time, finicky. Good work. GMD and then PDI's initial MRE have been very good to LRT over the past month. DEG also had a good run. I wonder when MGV will wake up...


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## finicky (8 October 2021)

Yes I was just looking at this today @kennas 
Considering if I should just take a quick profit - not my normal m.o
Like their picks but just bought it on impulse because of the big value lift in their GMD holding


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## bk1 (8 October 2021)

finicky said:


> profit - not my normal m.o




What i like about Lowell is that they are NOT shy about taking profits, but still retain a position if the company warrants it.
PDI being a prime example.
They were in TNT before becoming RDT.
I'm trying to do the same and not be hesitant about taking profits from what are still speculative plays.


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## Sean K (8 October 2021)

finicky said:


> Yes I was just looking at this today @kennas
> Considering if I should just take a quick profit - not my normal m.o
> Like their picks but just bought it on impulse because of the big value lift in their GMD holding




I think their top 5 still have a bit to run. Not sure if PDI's run has been factored into LRT as yet. They seem to lag by about a week of their key positions moving. 



bk1 said:


> What i like about Lowell is that they are NOT shy about taking profits, but still retain a position if the company warrants it.
> PDI being a prime example.




Yes, I think they own 4% of PDI. Not sure if they've taken profits yet? The coup has put about a 50% discount on PDI's already WeAf discount I reckon. I think they're heading towards a 5m + deposit in their next MRE upgrade in the first half of next year. Adding about 500k oz for every 50m they did deeper.


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## finicky (8 October 2021)

Thanks for your tip off @bk1 
P.S I hope they sold a few GMD in that spike and it shows up in the next dividend


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## Sean K (14 October 2021)

@finicky what's the story with the NAV vs SP? Does this indicate it's undervalued by 20 cents or so, or no correlation?


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## finicky (14 October 2021)

Yep, to my primitive understanding it does and was one of the reasons I bought. Not unusual for some of these lesser known LICs and LIT'S to trade at a discount however. Note though that some changes occurred in constituent share prices since Oct 6, e.g PDI down, MGV up ...
Some exposure to exciting stocks here (GMD)


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## coolcup (21 October 2021)

This entity has a very high management fee (3%+) and a very low bar for performance fees (18% of any increase in NAV). I'd price this at a discount with that fee regime!


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## Sean K (14 February 2022)

January update from LRT.

Not sure why they sold out of CTM and kept DEG. Maybe because DEG is further back on the Lassonde Curve in their mind, but I think CTM still has quite a bit of exploration upside. Maybe because CTM's into a DFS that puts them over the edge for their investment philosophy.

Some good Market Notes in the update, worth a read.

Price has gone sideways in line with market correction.


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## Dona Ferentes (13 April 2022)

bk1 said:


> What i like about Lowell is that they are NOT shy about taking profits, but still retain a position if the company warrants it.



_*Fund Investment Actions - March 2022*_

In *energy*, the Fund exited its position in ASX listed Cuban oil explorer Melbana Energy. Melbana’s share price rose almost 5 times since the start of February as it announced 2.5bn barrels of oil in place for in the upper sheet of its Alameda-1 JV well, and 119m bbls of prospective resource. The Fund took up its entitlement in the Hydrocarbon Dynamics rights issue.

In *gold*, the Fund participated in rights issues by west African explorers Golden Rim Resources and Marvel Gold. The positions in gold explorer’s E2 Metals and Carnavale Resources were increased while Carawine Resources received a takeover offer which allowed the Fund to exit at a profit. Investments were made in two new gold IPO’s Sierra Nevada Gold and Southern Cross Goldfields.

In March, the Fund trimmed some existing *base metals *exposures, but continued to add to its copper related investments in TSX listed Aguila Copper and Rugby Mining, and ASX listed Westar Resources.

A new *rare earths* investment was made in ASX-listed Rare-X Limited.


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## bk1 (13 April 2022)

They must have made a huge profit on Melbana Energy. They were into this one ages ago, well before the herd found out.


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## finicky (13 April 2022)

@bk1 I note they have a holding In KWR which has just embarked on a diamond drill campaign on Lake Goongarrie and is awaiting some Nickel hopeful assays. Also a few coincide with Tony Locantro's 2022 top picks: PGO, MKG, WSR. I'm reassured that they've stuck with a sizeable position in MGV which has gone nowhere since I accumulated.


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## Dona Ferentes (24 June 2022)

LRT has gone down with the market, and hit $1.40 this week. Now $1.45  and the most recent NTA estimate from 17/06 was $1.70

Top 10 last month
Cash .............................................. 9.2%
Predictive Discovery ........  Gold.. 6.8%
Genesis Minerals .............. Gold.. 6.5%
Musgrave Minerals ...........Gold.. 5.9%
De Grey  Mining ................ Gold.. 4.7%
Talon  Metals ..................Nickel... 3.2%
Southern Cross G'fields .. Gold .. 2.8%
Larvotto Resources .. Au-Cu-Li... 2.6%
Pacgold .......................Gold .........2.6%
Comet Ridge ...............Gas ...........2.6%
South Harz Potash...... Potash ....2.5%

Fund Top Performer 
Southern Cross Goldfields’ (SXG.ASX) share price rose by 217% by the end of the month, after listing on the ASX on 16th May. SXG, a spin out of long-term LRT holding Mawson Gold, is focused on epizonal (Fosterville-style) gold exploration in Victoria. LRT participated in both the seed equity and IPO raising for SXG. The company announced an intersection of 119m at 3.9g/t Aueq at its 100% owned Sunday Creek project north of Melbourne.



> Unaudited management accounts for the Fund currently indicate that the Fund will distribute *between 9c and 12c *per unit of unfranked distribution for the financial year. This is subject to change and an updated estimate of the distribution will be announced in the final week of June. This distribution forecast compares with a distribution of 14.9835c per unit for the previous financial year




Following a stellar couple of years, the fund hasn't done that well, recently: 12 months return of 6.5%, compared with 23.5% for S&P/ASX Small Resources Index (XSRD) and 16% for the ASX Resources 300 Index.

_- always a good place to go mining for the Monthly Comp tip/ guess. If nothing jumps out, I may even go for LRT._


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## Dona Ferentes (26 July 2022)

_Go big or go home?_

Entitlement Issue on the basis of 1 new unit for every 3 existing units (1:3) held at the Record Date with 1 free unlisted option attached to each new unit offered. 

The Entitlement offer has been set at the last closing price of $1.35 per new unit  and will raise up to $13.2m before costs ...


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## peter2 (26 July 2022)

Noticed that *LRT* has a mineral deficiency in their portfolio. Not enough copper. An essential element for healthy patient (portfolio) growth.






Low level of lithium also.


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## Dona Ferentes (26 July 2022)

peter2 said:


> Noticed that *LRT* has a mineral deficiency in their portfolio. Not enough copper. An essential element for healthy patient (portfolio) growth.
> 
> View attachment 144566
> 
> Low level of lithium also.



Oh, that copper (USD)






_+, Lithium was found be effective in treating acute manic and depressive episodes, _


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## finicky (13 August 2022)

Lowell trading at a discount again but my view is that the chart is still not a buy at this point because it has not bounced off the 1.30 support level. Price @ 1.29 finished the week on its low.
The dividend is good @ 0.116  which is 9% yield but has already gone ex 30th of June. Dividend is not franked which is a feature I shouldn't have ignored. Also I went off it after @coolcup's remark about the high management fee and low bar bonus performance fee.
I'm not selling but would only buy it again at a very cheap level.

Held

NAV statement 9 August:
"We advise that the estimated Net Asset Value per Unit of the Trust as at 5 August 2022 as $1.5816"

All Data *Weekly  



*


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## Sean K (13 August 2022)

finicky said:


> Lowell trading at a discount again but my view is that the chart is still not a buy at this point because it has not bounced off the 1.30 support level. Price @ 1.29 finished the week on its low.
> The dividend is good @ 0.116  which is 9% yield but has already gone ex 30th of June. Dividend is not franked which is a feature I shouldn't have ignored. Also I went off it after @coolcup's remark about the high management fee and low bar bonus performance fee.
> I'm not selling but would only buy it again at a very cheap level.
> 
> ...




Looks very bottomish to me at the moment. Around $1.20 looks very tasty. 

The reason for the capitulation is in their concentrated portfolio of mining minnows who have all far exceeded market moves to the downside. GDXJ, for example, has been creamed. But, IMO, it's a long term buying opportunity for quality developers. Might be another leg down, but that puts a 'for sale' sign out on some of the top stocks they play with.


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## Dona Ferentes (19 December 2022)

_Still trading below NTA,  and by a significant  amount _

*Fund Investment Actions - November 2022 *

In November, the Fund acquired a holding in UK North Sea _*gas*_ developer Hartshead Resources.
In *gold*, the Fund trimmed its shareholdings in ASX listed gold developers De Grey Mining, Genesis Minerals and Predictive Discovery, while adding to its position in Musgrave Minerals.
In_* Rare Earths*_, the Fund rotated from Australian Rare Earths to another South Australian explorer Taruga Minerals.
The Fund completed its exit from its position in Hot Chili and added to its investment in Sipa Resources.


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