Lion Selection Posts $39.2M Profit, Portfolio Grows 89% Amid Gold Rally

• Net profit after tax of $39.2 million, up 3,539%
• Investment portfolio value grew 89% to $77.7 million
• Key stakes in Saturn Metals, Brightstar Resources, and Antipa Minerals
• Strong cash position of $39.5 million with $51 million pro forma post asset sales
• Successful exit from Erdene Resource Development Corp with $12.3 million proceeds

Strategic Timing and Market Positioning

Lion Selection Group Limited has delivered a standout financial performance for the year ended 31 July 2025, posting a net profit after tax of $39.2 million. This remarkable turnaround, representing a 3,539% increase from the prior year, is largely attributed to the company’s astute timing in exiting assets at the peak of the last mining boom in 2021 and 2022. With a strong cash reserve, Lion capitalised on the subsequent market downturn by investing $41 million into undervalued Australian mining companies, a move that has paid off handsomely as the market begins to recover.

Portfolio Expansion and Key Investments

The company’s investment portfolio nearly doubled in value, growing 89% to $77.7 million by the end of the financial year. Lion has strategically increased its holdings in several multi-million-ounce gold companies based in Western Australia, including a 15.9% stake in Saturn Metals valued at $31 million, a 4.7% interest in Brightstar Resources worth $12 million, and a 3.7% holding in Antipa Minerals valued at $13 million. These investments benefit from rising gold prices and promising resource developments, positioning Lion to capture upside as these projects advance.

Financial Strength and Recent Transactions

Maintaining a robust balance sheet, Lion ended the year with $39.5 million in cash and term deposits, bolstered by a pro forma cash position of approximately $51 million following the post-year-end sale of its stake in Erdene Resource Development Corp for $12.3 million. This transaction also triggered a fully franked special dividend of 2 cents per share payable in September 2025. The company’s disciplined approach to portfolio management is further evidenced by the divestment of legacy investments such as Atlantic Tin, leaving PhosCo as the only significant remaining legacy holding.

Governance and Executive Incentives

In July 2024, Lion transitioned from a management agreement with Lion Manager Pty Ltd to directly employing its investment team, reflecting a more integrated operational model. Executive remuneration includes fixed salaries, short-term incentives, and long-term incentives via performance rights. Notably, 2,095,200 performance rights vested during the year, tied to share price and portfolio value milestones, with escrow periods extended to align with long-term shareholder interests. The company’s governance framework continues to emphasize accountability and alignment with shareholder value creation.

Legal and Environmental Considerations

Lion disclosed ongoing legal proceedings initiated by PT Prima related to historical agreements involving the Pani Gold Project. The company denies the allegations and is vigorously defending the claim. On the environmental front, Lion maintains a policy ensuring investees comply with relevant standards and has reported no known breaches. This commitment underscores Lion’s focus on sustainable and responsible investment practices within the mining sector.

Bottom Line?

Lion’s strong financial results and strategic portfolio moves set the stage for potential gains as the mining sector edges toward a new cycle.

Questions in the middle?

• How will Lion’s portfolio perform amid evolving gold price dynamics and junior miner valuations?
• What impact will the ongoing legal claim have on Lion’s operations and investor confidence?
• Will Lion continue to expand its stakes in key Australian mining projects or diversify further?