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LKCONSULT & Dolefin SA
RARE EARTH ELEMENTS FUNDA «market in the making»
with promising investment opportunities
Event: Swiss Mining Institute
Geneva, Zurich; March 18-19, 2014
Presented by: Urs Gmür, CFA, Portfolio Manager - Dolefin SA
March 2014 Slide 1
LKCONSULT & Dolefin SA March 2014 Slide 2
Content
• Basics of REE’s
• Review of past price developments
• Strong fundamentals, investments catching up
• REE-Fund
Exceptional magnetic and luminescence properties
Not rare … but difficult to extract: only 4 minerals exploited today
The ores always consist of a 'basket of rare earths’
Rare Earths are marketed primarily as oxides of high purity and mischmetal
Rare Earths Elements‘ Vitamins of the Modern
Industry’
March 2014
LKCONSULT & Dolefin SA March 2014 Slide 4
Strategic metals in key growth domains
Domains:
Energy
Transport
High Tech
Agriculture
www.ree-fund.com
LKCONSULT & Dolefin SA
Growth by sectors:
March 2014 Slide 5
Sector Uses Growth est. 2012-2018
Growth est. p.a. %
EnergyWind turbine; NiMH batteries; Compact fluorescent lights; LEDs; FCC, Magnetic refrigeration
61% 7%
Transport Electric & Hybrid vehicles; NiMH batteries; Catalytic converter 95% 10%
High Tech Neo magnets; LCD & LED panel displays; Polished glass 32% 4%
Agriculture Additive to fertilizer and feed additives 23% 3%
Source: Roskill, IMCOA and LKConsult
Slide 6
Demand of Rare Earth Oxides
0
20000
40000
60000
80000
100000
120000
140000
160000
180000
200000
2007 2008 2009 2010 2011 2012 2013-F 2014-F 2015-F 2016-F 2017-F 2018-F
REO
ton
nes
End use categories
Demand of REO Others (Ceramic, Medical, fertilizer,etc..)
Metal Alloys
Glass Additives
Polishing Powders
Phosphors
Fluid cracking catalyst
Autocatalysts
NiMH Batteries
Magnets
Roskill, IMCOA compilation LKConsult 2014
March 2014
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LKCONSULT & Dolefin SA
Review of REE-price history:2010 marks the turning point
2010 - Year of the reckoning:
Slide 7March 2014
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Consequences of price volatility:Quality has its price
Industry needs high quality products But difficult without REEs
Alternatives discussed but how realistic ?
Slide 8March 2014
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Consequences of price volatility:Separating wheat from the chaff
Calm after the storm Prices for LREEs retreat from panic-levels
But HREEs remain in shortage
Slide 9March 2014
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Importance of Private MoneyDo not count on Governments – stock market is the «incubator», historically
How new inventions are financed:
Governments historically unable or unwilling
New inventions seen as «gadget»
But…when related stocks rally, people listen
Phantasy arises
Slide 10March 2014
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Importance of Private MoneyThe classical S-curve pattern
Inventions follow the S-curve pattern:
Slide 11March 2014
Souce: The Next Great Bubble Boom, Harry S. Dent, Jr
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Importance of Private MoneyCycle related to the REE-market
REEs expected to behave similarly:
Slide 12March 2014
LKCONSULT & Dolefin SA
RARE EARTH ELEMENTS - FUND
Metals of the Future
Slide 13March 2014
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LKCONSULT & Dolefin SA Slide 14
Rare Earth Elements Fund (CHF)
The REE-Fund is actively managed as to take advantage of
market inefficiencies, appropriate strategy for an emerging
theme.
The REE-Fund follows a Mine-to-Market investment
strategy covering Mining, Refining, Manufacturing, Trading
and Recycling as to benefit from the whole value curve.
The REE-Fund is a niche Fund under Swiss law that invests
in REE-related listed stocks, worldwide.
March 2014
www.ree-fund.com
LKCONSULT & Dolefin SA Slide 15
Investment Philosophy
Maximum participation through REE growth drivers:- BRICs- New Materials – Commodities- Green Energy- High-Tech / Nano
Active approach to benefit from market inefficiencies
March 2014
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LKCONSULT & Dolefin SA Slide 16
Investment ProcessDerived from mine-to-market approach
Portfolio construction (management team)
Sector allocation (management team with input from
scientific committee)
Defining sectors (management team)
Implementation (asset manager)
Review (management team)
March 2014
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Team…of Professionals
Slide 17
Investment Committee (quarterly):
Dolefin SA LKConsult Scientific committee
– (3 members: research scientific, applied-research scientific, industry)
Management Team:
Asset Manager – DOLEFIN SA Portfolio Management, Technical Analysis (stocks, FX)
Geological Advisor – LKConsult Bottom-up analysis (geology, site visits, etc.)
March 2014
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LKCONSULT & Dolefin SA
Portfolio…current exposure
Slide 18
Sector allocation10 largest holdings:7.10% Tasman Metals(*)6.65% Hitachi Metals6.34% BYD 6.17% Molycorp4.43% China Rare Earth4.42% Eramet4.35% Mitsui Mining&Smelting4.34% China Molybdenum4.42% Great Western Minerals4.07% Chalco(*) including wts
March 2014
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Portfolio…Performance comparison
Slide 19
Best in a difficult environment
March 2014
REE-Fund outperformed the REMX-ETF by 32.84% since its inception!
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LKCONSULT & Dolefin SA
ContactsFeel free getting in touch with us!
Slide 20
LK CONSULTLaurent Krull, Senior Geologist, MscAvenue Reverdil 4CH-1260 [email protected]: +41 22 361’68’48
Contacts:
DOLEFIN SAUrs Gmür, CFA310, route de St-CergueCH-1260 [email protected]: +41 22 99’404’88
March 2014
Investing in the Rare Earth Elements industry
With a Mine-to-Market approach
Thank you
www.ree-fund.com
Investing in the Rare Earth Elements industry
With a Mine-to-Market approach
Thank you
www.ree-fund.com
Thank you !
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