News and Media

Saturday | Jan 1, 2011 10:00 AM

NewGen Asset Management is extremely pleased to announce that in its first full-year, the NewGen Mining Fund SPC returned 87.1% (net of fees) bringing the total return since inception (launched November 9, 2009) to 100.8% (net).  Meanwhile, the NewGen Mining Fund LP (launched April 1, 2010) returned 85.0% (net).  By comparison, the Bloomberg World Mining Index was up 26.7% and the S&P500 Index was up 12.6% over the same time period.

Despite a volatile first half of the year, caused by fears of a double-dip recession and spreading sovereign debt concerns, stocks rebounded and rallied into year-end as economic optimism returned and created a renewed appetite for risk. Demand from China and other emerging markets along with speculative inflows helped to push prices for certain metals to all-time highs. For the year, silver was up 83.2%, spot iron ore was up 43.0%, copper was up 30.2% and gold was up 29.5%.

Strong commodity prices created a very active M&A environment, with deals announced or completed totaling in excess of US$70 billion.  This provided a major source of return for the Funds with several core holdings being acquired over the year.  We expect this to remain a dominant theme throughout 2011 as cash-rich companies, acquisitive end-users and resource hungry State-Owned Enterprises rush to secure a pipeline of world-class projects.

The Funds also benefited from several other catalysts including exploration success, project de-risking (permitting, engineering studies, etc), production commencement and production growth.  The biggest source of return for the Funds over the year was Canaco Resources (CAN-TSXv), which is delineating a major gold discovery and district in Tanzania in a previously overlooked geologic setting.

The Funds continue to attract a high-quality investor base concentrated around high-net worth individuals that are actively involved in the mining industry. Assets under management grew steadily and exited the year at approximately US$55 million, up from the November 2009 figure of US$4 million.

“We are very pleased with the performance and asset growth of our Funds in 2010.  The outlook for the mining industry remains extremely robust and we are very confident in the prospects of all the positions in our Funds.  Our disciplined trading strategy and good liquidity profile enables us to act quickly and preserve capital in what should continue to be volatile market conditions.”