Lion Selection Group Limited (ASX: LION) has announced a significant turnaround in its half-year results, reporting a profit before tax of $19.2 million compared to a loss of $0.3 million in the prior corresponding period. This impressive performance is largely attributed to a $19.0 million mark-to-market gain on its investment portfolio, reflecting the company’s successful strategy of investing in micro-capitalisation resources companies. Key investments such as Antipa Minerals, Brightstar Minerals, and Saturn Metals have experienced material re-rating, contributing significantly to the overall portfolio performance, which was up 57% during the half-year.
Lion has been actively deploying capital, investing $10.6 million in the half-year, primarily focused on precious metals, base metals, and strategic materials opportunities within Australia. The company’s investment team, now led by Managing Director Hedley Widdup, are focused on companies with strong growth outlooks, potential for project de-risking, and leverage to cyclical recovery.
The company boasts a robust balance sheet, with net cash of $47.0 million available for investment. This positions Lion favorably to capitalize on opportunities within the currently weak junior resources market. While the company acknowledges the inherent risks associated with the mining and exploration industry, including market conditions and operational risks, they are optimistic about future prospects.
No dividend was declared or paid during the period. Lion also faces a legal claim, which they intend to vigorously defend, and its potential financial impact is currently not estimable.
