Lion Selection Group (ASX:LSX) says recent developments in its legacy portfolio are “beginning to demonstrate the compelling value Lion has always recognised in these companies that Lion has patiently held”.
The investment firm’s legacy portfolio comprises offshore investments made prior to Lion’s decision in 2022 to focus new investment on Australia, with these investments awaiting realisation once their contained value can be achieved.
Lion carefully selects a small number of opportunities that have “excellent prospects for development and offer deep value”. The company aims to align investing decisions with the mining cycle.
As of 30 April 2025, the company had net cash of $43.2 million and the size of its portfolio was $120.4 million.
The investment firm reset its investment strategy in 2022, having finalised major asset sales and underlying assets becoming majority cash. New Investments – which are separate from the Legacy Investment Portfolio – are companies invested in by Lion for the first time after 1 January 2022, and are focused completely on Australian projects. Performance includes realised gains as well as value of portfolio holdings.
Managing Director Hedley Widdup says Lion is very focused on new investment in Australia but continues to actively manage these legacy investments aiming to maximise the tremendous value potential.
One legacy investment includes Atlantic Tin (unlisted), which on 1 May 2025 announced a recommended takeover offer from Xingye Silver & Tin for A$0.24 per Atlantic Tin share. Atlantic Tin’s largest shareholder Pala owns 71.39% of Atlantic Tin and intends to accept the offer in the absence of a superior proposal.
Pala has also granted Xingye a call option for 19.99% of Atlantic Tin’s shares on issue.
The transaction is subject to Australian takeover rules and key conditions of Chinese regulatory approval and a 90% acceptance from Atlantic Tin shareholders. Lion will revalue its Atlantic Tin investment at $0.24 or $3.2M from 31 May.
This offer represents a premium of 20% to the price at which Lion currently values Atlantic based on the most recent capital raising (November 2024); and 1,500% to the price at which shares in Kasbah Resources (ASX:KAS) (the former name of Atlantic Tin) were trading on the ASX immediately prior to its delisting on 22 September 2020.
Assuming that the takeover proceeds, Lion will be required to pay some $1.1 million from the Atlantic Tin proceeds to the former shareholders of African Lion. This obligation arises from Lion’s acquisition of the Atlantic Tin shares from African Lion, with Lion agreeing to pay contingent consideration to the other African Lion shareholders in certain circumstances for up to five years ending 3 March 2026.
Another Lion legacy investment of note is Erdene Resource Development Corp (TSX:ERD).
According to Lion, project development is in its final stages at Erdene’s Khundii gold project in Mongolia, being developed with its partner Mongolian Mining Corporation.
“Production is expected in the coming months positioning Erdene strongly to take advantage of record high gold prices. Erdene is approaching maturity within Lion’s portfolio and with improving trading liquidity as it moves towards gold production,” Lion reports.
“It is one of few companies listed in Canada that are on the cusp of gold production and has traded strongly, from a price of C$0.435ps on 31 July 2024 to C$0.870ps on 30 April 2025 to value Lion’s Erdene holding at A$12.2 million.”
Meanwhile, PhosCo (ASX:PHO) is aiming to become a global fertiliser supplier following formally securing 100% ownership of its flagship Gasaat Phosphate Project in Tunisia. Lion notes that Gasaat already hosts a significant JORC resource of 146.4Mt at 20.6% P2O5. The mineralisation is open, and on 19 March 2025 PhosCo announced the maiden exploration targets for Gasaat and the nearby Sekarna Phosphate Project covering the major areas of phosphate outside the existing Gasaat mineral resource estimate.
Site preparations to test the extensional targets are currently underway and a diamond rig is mobilising to site and is expected to commence drilling imminently. PhosCo’s fully underwritten $5 million entitlement offer closed on 1 May 2025, with Lion committing to priority sub-underwriting for $1 million and also agreeing to advance a loan to PhosCo for $500,000 to fast track work on Gasaat and Sekarna.
PhosCo has also signed a mandate letter with the European Bank for Reconstruction & Development (EBRD) for a potential US$500,000 strategic investment. These funds will contribute towards a Gasaat Bankable Feasibility Study (BFS).
Write to Adam Orlando at Mining.com.au
Images: Erdene, PhosCo & Unsplash
