Tribeca Global Natural Resources : June 2022 - NTA Statement

14 July 2022

onlyASX Market Announcements ASX Limited

20 Bridge Street Sydney NSW 2000

BY ELECTRONIC LODGEMENT

useMonthly NTA Statement and Investment Update as at 30 June 2022

In accordance with ASX Listing Rule 4.12, please find attached statement of TGF's net tangible asset backing of its quoted securities as at 30 June 2022.

For any enquiries please contact TGF at [e-mail] by calling [phone].

personalAuthorised for release by the Board of Tribeca Global Natural Resources Limited. Ken Liu

Company Secretary

Tribeca Global Natural Resources Limited

For

Sydney	Singapore	Web: www.tribecaip.com/lic
Level 23, 1 O'Connell Street	Level 16, Singapore Land Tower	Email: [e-mail]
Sydney NSW 2000 Australia	50 Raffles Place, Singapore 048623	ABN: 16 627 596 418
T [phone]	T [phone]

Monthly NTA Statement

Investment Update as at 30 June 2022

onlyPerformance Summary

After recording seven consecutive quarters of positive performance which saw the Company's NTA increase by 76.9%

on a post-tax basis, the Company finished the second quarter of 2022 with negative quarterly performance of -23.85%, including a fall in NTA of -17.67% on a post-tax basis (from $174.4m to $143.5m) in June.

At the core of our investment philosophy is the need to protect capital during down cycles and we have historically done that well including during the 2014-15 nadir for the natural resources sector when the strategy generated positive

returns. The recent aggressive, sharp selloff in the natural resources sector over the last several months has surprised

us given the almost non-existent balance sheet leverage in the sector versus prior bear markets. Record low levels of inventory, lack of new supply across the commodity complex and recent announcements of Chinese economic stimulus with a particular focus on commodity heavy infrastructure spending sees us maintaining our constructive view on the sector.

usedemand growth as well as the prospect of a U.S. economic recession, we continue to see deficit markets across most energy and mining commodities this year and balanced markets for next year. The structural reason for being long natural resources in the medium term has increased with supply issues likely to be much greater from 2024 onwards into the latter part of the decade. Our portfolio, which we discuss in detail below, is largely free of debt, generating

While we do acknowledge the potential impact that the energy crisis playing out in Europe will have on European

strong cashflow even at lower commodity prices, and likely to increase capital returns in this environment. The companies held in our portfolio are also generally well-positioned to acquire assets should further stress be felt by the broader economy.

We will provide a more detailed outlook in the weeks ahead but would like to reiterate the following:

personal	1.	Our primary goal is capital preservation and growth through the cycle. While the severity of the current
	fundamentals.
		drawdown has been sharp, it is within the magnitude of prior drawdowns for the strategy, and we believe the
		outlook on a medium-term basis remains strong for our strategy and the sector
	2.	We continue to be heavily aligned with shareholders with board and management the largest and only
		substantial shareholder in TGF.
	3.	Our long-short strategy with a global focus allows us to run substantial short positions for extended periods
		should we see prospects for the global economy materially worsen along with serious deterioration in company

June marked a difficult end to the quarter as developed market equities posted their worst first half performance in over 50 years. Concerns over the deteriorating economic growth outlook in the US and Europe have dominated all markets lately, with resources no exception. The sell-off that initially started in industrial metals, which heavily impacted our portfolio in May, not only broadened to other sectors but intensified over June. Base metals such as copper and nickel slumped 22% and 29.5% respectively over the 2Q, falling -13.8% and -20% alone in June, with corresponding producer equities falling even harder than the underlying metals. As recession fears have gripped risky assets, commodities have become positively correlated to equity and bond markets and negatively correlated to the US Dollar, a stark departure from previous months when commodities delivered outstanding diversification benefits to investors.

Against this backdrop, all sector exposures within the portfolio came under heavy selling pressure. Metals were the

	biggest drag on performance with large falls witnessed in the fund's holdings in base metals (-5.8%) - mainly copper
	and nickel names, battery metals (-5.6%) and precious metals (-4.0%). Uranium related holdings also fell heavily,
Fordetracting -3.75% in June with equity moves highly correlating to crypto and tech flows, despite increasingly attractive
	newsflow and fundamentals for the sector.
	Sydney	Singapore	Web: www.tribecaip.com/lic
	Level 23, 1 O'Connell Street	Level 16, Singapore Land Tower	Email: [e-mail]
	Sydney NSW 2000 Australia	50 Raffles Place, Singapore 048623	ABN: 16 627 596 418
	T [phone]	T [phone]

The portfolio's exposure to carbon credits also dragged on performance (-1.5%) as geopolitical issues, along with energy and food inflationary pressures weighed on the voluntary carbon market with lower volumes across the board seen during June, despite large latent demand on the sidelines. Our portfolio is exposed to a diverse portfolio of high- quality REDD+ and cookstove projects with almost 80% of our REDD+ holding in 2018 and later vintages for which we have recently seen a premium versus earlier vintages.

Sector positioning remains consistent with our long-term structural themes related to decarbonisation and green policy, along with expectations for fiscal and monetary policy. Accordingly, the portfolio's largest sector exposures are to base and battery metals, energy, carbon credits (almost exclusively voluntary carbon credits) and precious metals.

Current Top 10 Long Equity Exposures

		Sector	Company	Weight	Comment
only	Oil & Gas	Santos Limited	~9%	• Announced major buyback in May, asset sales (especially PNG and Alaska),
			along with FCF generation likely to result in significant dividend and buyback
					growth
					• 3x EV/EBITDA at spot, or 35% discount to NAV, heavily leveraged to global gas
					shortage
		Diversified	Glencore PLC	~7%	• Expect significant capital management initiatives (both dividend and increase to
					current buyback)
					• 2x EV/EBITDA at spot, with FCF yield approaching 20%
					• Heavily exposed to European energy shortage
use	Diversified	Teck	~7%	• Has combination of copper growth and capital management which is being
	Resources		funded by record met coal and oil prices
			• Optionality to breakup assets could unlock material value
		Base Metals	Freeport	~7%	• Company is rapidly deleveraging after growing production base material in
					recent years which sets up further capital returns, trading at GFC levels when
					debt was 4x higher
		Oil & Gas	US Silica	~6%	• Rapidly deleveraging balance sheet including material debt repayment this
			Holdings		week which has led to S&P removing credit watch
					• Frac Sand market in the US will remain tight and stock could be a key takeover
					target
		Battery	Neo	~5%	• Expect to secure additional feedstock for Estonia facility, as well as government
		Metals	Performance		funding for additional facilities
			Materials		• 4x EV/EBITDA - versus 8x for peer Specialty Chemicals companies
		Uranium	Energy Fuels	~5%	• Will continue to grow strategic exposure to rare earths, while remaining only
			Inc		operating uranium and rare earths processor in US, well-funded, cash is ~30%
					of market cap and no debt
personal	Bulks	Mineral	~5%	• Diversified exposure to China recovery (iron ore), ongoing lithium strength, and
	Resources		broader recovery in Australian mining activity via mining services business
					• 3.5x EV/EBITDA
		Uranium	Cameco Corp	~5%	• Leading uranium producer with a suite of high-quality production and
					exploration assets. Growing contract book driving material profitability
					improvement
					• 25% discount to core NAV
		Uranium	Boss	~5%	• Shovel ready, fully permitted Tier-1 uranium asset, to be delivering production
			Resources		into ever tightening market. Potential takeover target.

• 5x EV/EBITDA once in production

Note: the information contained in the above table is general in nature and is not investment advice nor personal securities recommendation.

Largest Single Equity Detractors Year to Date

For	Sector	Company	Gross	Comment
		Attribution
Precious	Chalice Mining	-2.51%	• Delays in receiving drilling permits slowed exploration news flow
Metals			• With permits now received, exploration catalysts expected to pick up
				• 40% discount to $6/sh valuation based on known deposit alone
	Battery	Develop Global Ltd	-2.15%	• No negative stock-specific news. Indeed, signed $400m mining
	Metals			services contract
				• Expect imminent additional mining contract, along with exploration
				news at operated mines
				• 40% discount to $3.20 valuation
	Battery	Rock Tech Lithium	-2.04%	• No negative stock-specific news
	Metals

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Precious Metals

Northern Star Resources

personalNote: the information contained in the above table is general in nature and is not investment advice nor personal securities recommendation.

Outlook

Resources markets remain in deficit on strong demand

We believe it is premature for commodities to succumb to recession concerns when the global economy is still growing and markets remain in deficit on strong demand. Thus, we view this price pullback as a longer-termbuying opportunity. Barring a large synchronous negative global demand shock that creates a level-shiftdown in demand, we believe demand rationing will remain the dominant theme for energy and food commodities while an accelerated stimulus program in China should help to create a turnaround in base metals pricing in Q3. Thus, we believe the correlation between commodities and other risky assets is set to decline.

Volatility expected to remain high

Battery Metals

-1.29%

-1.27%

Alpha HPA

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•

•

•

•

•

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Battery Metals

Nickel Industries

-1.50%

•

Uranium

Energy Fuels Inc

-1.52%

•

•

•

Services

-1.53%

DDH1

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•

•

Battery Metals

Neo Performance Materials

-1.54%

•

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use only

•

Bulks

U.S. Silica Holdings

-2.01%

•

Announced MOU with ThyssenKrupp regarding a strategic partnership

Deleveraging oil services play which came under pressure due to notionally high debt

Well placed to capitalised on increasing activity in US oil and gas sector

Should refinance and/or repay debt this half year, helping close 35% discount to core value

Fears that Estonian operations could be impacted by Russian proximity risk

Expect to secure additional feedstock for Estonia facility, as well as government funding for additional facilities

4x EV/EBITDA - versus 8x for peer Specialty Chemicals companies

Impacted by margin contraction fears, and yet continues to grow

EBITDA

Just over 2x EV/EBITDA - versus 5x for major Canadian peers

Impacted by degradation in retail sentiment towards uranium sector Will continue to grow strategic exposure to rare earths, while remaining only operating uranium and rare earths processor in US Lower 48

Impacted by weakness in nickel price, along with concerns regarding major Chinese shareholder

Expected to grow production 3x 2021-20234x EV/EBITDA

No negative stock-specificnews

Expected to complete construction of first facility in Sept 55% discount to core valuation

Not immune to cost inflation, but better placed than most peers Leading FCF generation and production growth

4x EV/EBITDA in 2023 - 20% discount to peers

•

ForWhile many commodity markets remain remarkably backwardated so is volatility, making commodities harder to invest in, trading frictions have pushed up near-datedvolatility and raised initial margins to extreme levels, thus pushing more market participants off-exchange.This has cemented a negative spiral between low liquidity and high volatility. While current price levels do not seem to reflect current micro conditions nor the full impact of Russian sanctions, long-terminvestors in commodities will likely have to continue to stomach higher volatility in return for a significant total return pay- off.

Latest price moves are divorced from fundamentals

We find this latest pricing behaviour of commodities largely unjustified, disassociated from underlying physical fundamentals and primarily driven by financial liquidation. Although in the near term we expect spot commodity prices to remain vulnerable to liquidations of speculative length triggered by negative economic news flow, such as the recent weak US and European PMI prints and weak recovery data in China, we view these price pullback as longer-termbuying opportunities.

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BITCOIN (RHS)

ARKK Innovation ETF

URNM

3-Apr

3-Oct

3-Jan

3-Sep

3-May

3-Feb 3-Mar

3-Nov 3-Dec

$20

$40

$60

$100

$80

$120

$140

Uranium stocks - Highly Correlated to Tech and Crypto

3-Jun

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

As an example of this type of dislocation we highlight uranium, which currently represents a meaningful net long exposure and a long-standing theme in our portfolio. Uranium equities have been divorced from fundamentals and have exhibited high correlation to downward moves in listed technology and crypto.

onlyuse

personalSource: Bloomberg

Uranium remains a long-term exposure within the portfolio as the global push for energy independence following Russia's invasion of Ukraine has provided a tailwind for uranium expectations, as nuclear build-outs are back in vogue. The role of uranium, and wider nuclear technology, in a low-carbon global economy is becoming ever clearer. Given this pathway, we believe the uranium price will ultimately have to rise to necessary levels to stimulate the increased production required to match growing demand needs; With a backdrop of improving sentiment in uranium, the mining equities under coverage all offer potential for upside, in our view, particularly as a derivative of the current energy trade as security of supply has come into sharp focus. However, at this juncture we prefer the producers and more advanced developers which are well positioned to benefit from focus on security of supply

Resources are a great macro hedge

In addition to the structural super-cycle arguments that we have laid out recently, the primary rationale for investing in commodity markets from a portfolio perspective remains inflation hedging and geopolitical risk protection and diversification. All of these arguments remain intact. Energy commodities, particularly oil, should continue to hedge inflation even after it peaks while remaining the best hedge against stagflation as well as the continued heightened

Forgeopolitical uncertainty.

Overweight Metals and Energy

Macro recession concerns trumping a tight micro picture for now, cross commodity correlations have increased. That said, we continue to believe that the energy and industrial metals sectors remain more resilient to developed market growth concerns as they have a strong micro story. Lastly, base metals are likely to remain highly sensitive to global macro sentiment until clear evidence emerges, likely in the course of Q3, that Chinese policymakers are doing enough, through fiscal and credit growth policies, to boost activity onshore. That, in our view, should then serve as a turning point and help to realign metals pricing with the tight underlying pictures of low inventories and sharply rising cost curves. All in all, given the focus on rising developed market recession risks, we believe that precious metals and energy are the sectors on which to be overweight in the near term.

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