Gresham Resources Royalties Fund

Overview

The Gresham Resources Royalties Fund (GRRF) invests in mining and energy royalties, commodity streams and royalty related structured solutions. The fund achieved its first close in August 2019 along with the acquisition of the first royalty over a significant coal seam gas asset in Queensland, Australia.  

GRRF has backing from a leading institutional investor in additional funding for new transactions to deploy up to $150m in natural resource royalties prior to seeking an IPO.

 

Investment Strategy

GRRF provides investors with direct exposure to a high quality portfolio of royalty related assets across a range of natural resources projects primarily in Australia, while providing superior risk adjusted returns.

Royalties are a unique way to gain exposure to commodities as an asset class as they have limited or no exposure to operating costs, whilst retaining key upside exposure to production expansion and exploration success.  A well diversified royalty portfolio can further reduce risks and trade at premium to individual royalties.

The fund is building a portfolio of natural resources investments, which can provide both income and growth whilst seeking to minimise the downside risk usually associated with investing in mining activities such as costs and exploration expenditure. GRRF does this by investing in royalties over projects which are already in production, and pre-production projects which are inherently riskier but which offer the possibility for significantly higher returns.

The portfolio has a base of producing royalties that are generating cash-flows to enable regular income distributions to investors. GRRF can invest up to 30% of the fund in pre-production royalties which are higher risk, but and can produce stronger returns and growth potential. Pre-production opportunities will be considered when there is a clear path to production and strong underlying project fundamentals and where additional risk-adjusted returns can be generated from royalty maturity, resource to reserve conversion and production expansion.

Individual company and project exposures is limited to 25% of the mature portfolio with the allocation across commodities to create further diversification.

Portfolio

Talinga Gas Royalty

In September 2019 GRRF completed the acquisition of a royalty over the Talinga and Orana gas fields in Queensland’s Surat Basin

  • The royalty covers the area which had previously been designated as ATP692 and now converted into a number of production licenses.
  • The operator of the ATP692 area is Australia Pacific LNG (“APLNG”), a joint venture between Origin Energy, ConocoPhillips and Sinopec.
  • The assets are Gross Overriding Revenue Royalty (“GORR”) interests on a number of key operating fields including the Talinga and Orana fields and are one of the major sources of feedstock for LNG export
  • The permits are located across a number of highly productive CSG areas considered to have some of the highest permeability and to be some of the best CSG “sweet spots”
  • Focus area for production extension and expansion with significant existing gas collection and processing infrastructure
  • In addition to supplying gas to the LNG project, the permits supply gas to the domestic gas market

 

GRRF Management Team and Investment Committee

GRRF has an experienced management team and investment committee with significant resources and financing experience.

Simon Klimt
Managing Director

Simon has been dedicated to the royalties sector since established Royalty Stream Investments with James Morrison in 2013.

Simon was the former Director of Oil and Gas Investment Banking, Australia at Barclays Capital and has over 20 years direct capital markets experience focused on the natural resources sector.

E: sklimt@gresham.com.au

M: 0419 600 752

 

James Morrison
Managing Director

James oversaw all aspects of Royalty Stream Investments in partnership with Simon Klimt with specific responsibility for deal origination and investor relations.

James was previously the Head of Barclays Natural Resource Investments in Australia in 2009-2011 and Head of Commodities Sales in Asia and Australia at Barclays Capital from 2000 – 2008. James had over 30 years’ experience in the resource sector.

E: jmorrison@gresham.com.au

M: 0422 379 731

 

Investment Committee Members

Tony Berg AM

Tony joined Gresham in 2000 and is Chairman of the Gresham Property Investment Committee. Tony was Managing Director of Macquarie Bank from 1985-1993 and Managing Director of Boral from 1994 until he led a split of the company into Origin Energy and Boral. He was Chairman of ING Australia and ING Bank Australia.

 

Michael Chaney AO

Michael is Non-Executive Chairman of Wesfarmers Limited.

Michael graduated with Bachelor of Science and Master of Business Administration degrees from The University of Western Australia in 1972 and 1980 respectively. He completed the Advanced Management Program at Harvard Business School in 1992 and has also been awarded an Honorary Doctorate of Laws from The University of Western Australia.

After obtaining his Science degree, Michael worked for eight years as a petroleum geologist in Australia and the USA. He joined the Australian Industry Development Corporation in 1980 as a corporate finance executive and became Manager for Western Australia in 1981. He joined Wesfarmers in 1983 as Company Secretary and Administration Manager, became Finance Director in 1984 and was appointed Managing Director in July 1992. He retired from that position in July 2005.

Michael is the former Chairman of Woodside Petroleum Limited (retired April 2018) and was Chairman of the National Australia Bank (retired December 2015). He is former Chancellor of The University of Western Australia (retired December 2017) and is currently Chair of the National School Resourcing Board. Michael is also a director of the Centre for Independent Studies and a Governor of the Forrest Research Foundation.

 

Neville Spry

Neville has over 30 years experience in corporate advisory activities and has provided advice to leading Australian and international companies in most industry sectors, including resources, agribusiness, wealth management, finance and banking, insurance, property, retail, health care, utilities and information technology.

These transactions include public markets transactions such as hostile and recommended takeover offers and defences and takeovers and mergers by scheme of arrangement; private treaty transactions such as business and asset divestments and acquisitions; and equity and debt capital raisings.

 

Tim Elliott

Tim has over 15 years experience in Resources M&A including nearly 8 years at Glencore Plc. Prior to joining Regal Funds Management in February 2018, Tim was Executive General Manager, Business Development and Strategy at Glencore where he was responsible for the identification, evaluation and execution of M&A globally for Glencore’s largest division. Tim is a CFA Charter holder and graduate of Harvard Business School.

James Hood

James joined Regal Funds Management in April 2019 as a Senior Analyst covering the Energy sector. James has over 10 year’s experience working on transactions within Australia’s energy sector including corporate development roles at Iluka Resources and Beach Energy. Prior to joining Regal, James worked at Rothschild Global Advisory covering merger and acquisition activity focused on the oil and gas sector.

Careers

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Gresham is always looking for highly motivated and enthusiastic candidates who have the drive to solve problems and achieve results on behalf of our clients.