Strategy and investment process
Investment Strategy
Lion invests in a portfolio of carefully selected companies with outstanding management and projects providing a balanced exposure to the high risk/high reward junior resource sector. Investments will be either direct or via the African and Asian Lion funds managed by Lion Manager.
The strategy is to provide funding at an early stage to assist the companies along the development curve, and exit following considerations of value after project development and the timing of the investment cycle.
Lion aims to invest only in Small and Medium Enterprises (SMEs) with outstanding people and excellent value and growth potential.
The company’s investment strategy is built around the following parameters:
- Make up to 30 investments of around A$5–A$10 million each.
- Direct approximately half of the investment funds to projects located in Australia, with the balance to be used for projects in Africa and South East Asia.
- Focus on companies involved in precious and base metals, not oil or gas.
- Concentrate on projects that are close to development or with exposure to advanced exploration.
- No investment to exceed 30% of Lion’s capital.
Investment Process
The investment selection process varies on a case by case basis, but generally includes:
- Identification of investment opportunities for further evaluation
- The first priority is always to select top quality people
- Assessment and valuation
- Investment proposals are subjected to a series of filters, including country and political risk, technical assessment, valuation methodologies.
- A priority list of ten investment opportunities is identified and assessed further by the Manager.
- Board recommendation, inspection and decision.
Operations/Royalties Division
Typically larger, value driven, investments made at the time of project finance or when an opportunity arises. These investments are likely to be sourced as follow-on investments from companies already held by the Investments Division at an earlier stage. These investments will be in companies, non-operating project stakes or operations, and may be held through the investment cycle as core assets.