Cuban Focused Conglomerate
February 2017
Disclaimer
This presentation (in this projected form in hard copy and as verbally presented) (collectively “Presentation”) is provided on the basis that neither Leni Gas Cuba Limited and Knowlton Capital Inc. (to be renamed LGC Capital Ltd) (the “Company” or “LGC”), nor its
officers, shareholders, related bodies corporate, partners, affiliates, employees, representatives and advisors make any representation or warranty (express or implied) as to the origin, validity, accuracy, reliability, relevance, currency or completeness of the
material contained in the Presentation and no responsibility is taken for any errors or omissions. Nothing contained in the Presentation is, or may be relied upon as, a promise, representation or warranty, whether as to the past or the future. LGC excludes all
warranties (including implied warranties) and all liability that can be excluded by law for any loss, claim, damage, cost or expense of any nature (including that arising from negligence) arising out of the Presentation (or any accompanying or other information)
whatsoever, nor by reason of any reliance upon it. LGC accepts no responsibility to update any person regarding any inaccuracy, omission or change in information in this Presentation or any other information made available to a person or any obligation to
furnish the person with any further information.
This Presentation includes certain statements that may be considered “forward-looking information” within the meaning of applicable Canadian securities regulations and “forwarding-looking statements” within the meaning of the United States Private Securities
Litigation Reform Act of 1995 (collectively, “forward-looking statements”). All statements in this Presentation (other than statements of historical facts) are forward- looking statements.
The forward-looking statements contained in this document are made as of the date of this document. Except as may otherwise be required pursuant to applicable laws, the Company does not assume any obligation to update or revise these forward-looking
statements, whether asa result of new information, future events or circumstances after the date of the Presentation, or to reflect the occurrence of unanticipated events.
The forward-looking statements in this document reflect the current expectations, assumptions or beliefs of the Company based upon information currently available to the Company. Where such statements expressly or impliedly relate to future events,
expectations and/or belief as to future eventsor results, involve known and unknown risksand uncertainties such expectation or belief isexpressed in good faith and is believed to have a reasonable basis.
Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and no assurance can be given that these expectations will prove
to be correct as actual results or developments may vary or differ materially from those projected in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include prevailing and
projected market prices, exploitation and exploration estimates and results, continued availability of capital and financing, and general economic, market or business conditions. Factors that could cause actual results to differ materially from those in forwardlooking statements include fluctuations in exchange rates and certain commodity prices, uncertainties related to mineral title in the projects, unforeseen technology changes that results in a reduction in commodity demand and the general level of global economic
activity. Readers are cautioned not to place undue reliance on forward-looking statements due to the inherent uncertainty thereof.
This Presentation references other corporations and provides certain information in relation to these corporations. All such information was obtained from the public record. The Company provides no assurances as to the accuracy or completeness of such
information and readers are cautioned not to place any undue reliance on such information.
LGC has not made any independent inquiries as to the accuracy or completeness of the press release issued by MEO Australia and LGC assumes no responsibility for the contents thereof. LGC cautions that the press releases issued by MEO Australia refer to
"Prospective (Recoverable) Resource" in connection with Block 9 PSC. LGC assumes that such term and any other similar terms i n the press releases were used in accordance with applicable Australia regulations but is not able to so confirm. Further, LGC is not
able to confirm whether applicable Australian regulations are equivalent to those in the Canadian Oil and Gas Evaluation (COG E) Handbook and cannot confirm whether the disclosure in the MEO Australia press releases complies with the COGE Handbook and
applicable Canadian regulations. Investors are cautioned to take all of the foregoing into consideration when reading the press releases issued by MEO Australia, respectively, particularly any references to "prospective resources".
All persons should seek appropriate professional advice in reviewing or considering the Presentation and all other information wi th respect to LGC and evaluating the business, financial performance and operations of LGC. Neither the provision of the Present ation
nor any information contained in the Presentation or subsequently communicated to any person in connection with the Presentat ion is, or should be taken as, constituting the giving of investment or financial product advice to any person in respect of dealing in
LGC securities, and no such information should be taken to constitute a recommendation or statement of opinion that is intended to influence a person in making a decision to deal in LGC securities.
Some photos and pictures in this Presentation are for illustration purposes only and do not depict current LGC operations.
This Presentation does not purport to contain all of the information that may be required to evaluate all of the factors that would be relevant in determining whether to deal in LGC securities, including but not limited to any person's objectives, financial situation or
needs. Each person must not rely on the information provided but should make, and will be taken to have made, its own investi gation, assessment and analysis of the information in this Presentation and other matters that may be relevant to it in considering
whether to deal in LGC securities. The information contained in the Presentation is not intended to be an offer for subscript ion, invitation or recommendation with respect to the shares in any jurisdiction and neither this document nor its contents shal l form the
basis of any contract or commitment.
LGC owns the copyright in this Presentation. No part of this Presentation may be shown or distributed to third parties or reprodu ced, stored or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without pri or
written permission of LGC. The distribution of the Presentation in jurisdictions outside the United Kingdom and the British V irgin Islands may be restricted by law and you should observe any such restrictions.
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LGC Saw It Coming The Lifting Of The U.S. Embargo
March 2016 – Barack Obama visited Cuba
▪ The first sitting U.S. president to since the 1959 revolution.
▪ Mr. Obama stated, “Change is going to happen in Cuba.”
The U.S. embargo has lasted longer than five decades
▪ Prevented U.S. citizens from travelling to Cuba and U.S.
companies from doing business in the country.
Soon after the meeting a number of impediments
were lifted allowing Americana access to Cuba for
travel and business.
(AFP/Nicholas Kamm)
“For a U.S. president to touch
down at Jose Marti airport in
Havana and be warmly greeted
by Cuba’s foreign minister was
until recently unthinkable.”
- The BBC
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Business & Investments
Since early 2015, LGC has been investing and signing joint ventures
with international companies that are well established in Cuba.
Positioned in key growth areas:
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Oil & Gas
Travel & Tourism
TV & Film Production
Sports Management
Import & Export
Agricultural – Coffee & Citrus Fruit
Renewable Energy
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Current Interests & Joint Ventures
Melbana Energy
13.76%
140,716,573 shares
Cuba Mountain
Coffee Inc.
Groombridge
Trading Corp.
10%
50/50
Joint Venture
Rushmans Ltd.
50/50
Joint Venture
TravelWelcome
& In Cloud 9
Petro Australis
Limited
40%
15.4%
10,961,667 shares
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Competitive Advantage
• LGC Capital provides a unique, first mover advantage for investors.
• All investments and joint venture businesses have been operating in
Cuba for years.
• Other companies trying to break into Cuba, will endure a lengthy
process and red tape to become established in the country.
• LGC’s interests have fully operational offices in Havana.
• Highly experienced “on the ground” local expertise.
• Relationships with many Government entities.
• Massive potential to expand through investment and partnering in
many more sectors.
• Opportunity to cross-sell opportunities through various business units.
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Investment: Oil & Gas
Melbana Energy
▪ In February 2016, LGC acquired 13.76% interest in Cuban oil explorer Melbana
Energy.
▪ Listed on the Australian Securities Exchange (ASX): trading symbol - MAY
▪ Melbana is pre-qualified as a foreign onshore and shallow water operator in Cuba.
▪ Awarded 100% interest in the 2,380 km2 onshore oil block, Block 9 PSC in Cuba, in
September 2015.
Petro Australis Limited
• LGC owns approximately 15.4% of Petro Australis Limited.
• Petro Australis is an unlisted public company incorporated in Australia.
• Petro Australis’ principal activity is sourcing oil and gas opportunities in the Americas with a
focus on Latin America (including Cuba).
• Petro Australis holds a conditional 40% back-in option to the onshore oil block, Block 9 PSC in
Cuba.
• As LGC holds a 15.14% interest in Petro Australis, which holds a conditional 40% back-in option
to Block 9 PSC, the investment by LGC in MEO significantly increased LGC’s underlying
exposure to Block 9 PSC.
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Investment: Oil & Gas
• The Gulf of Mexico is one of the world’s great petroleum mega
provinces.
• Cuba represents an under-explored south-eastern margin of
this province.
• U.S. Geological Survey estimates undiscovered technically
recoverable reserves of 4.6 billion barrels in North Cuba.
• Cuba currently producing ~80,000 boe per day, but seeking to
grow production.
• Imports ~50% of oil, mostly from Venezuela.
• Varadero field: >11 billion barrels OOIP.
• Local market for oil and gas.
• Limited application of modern exploration techniques due to
50+ year U.S. embargo.
• Melbana staff experienced with Cuban-style geology.
Source: Melbana Energy
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Investment: Oil & Gas
Cuba Block 9 – Positioned in oil rich highly prospective area.
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Total size: 2,380 km2.
Located onshore and close to infrastructure.
Lightly explored – contains natural oil seeps.
Adjacent to Sherritt International (TSX-S)
producing property.
• ~18,000 barrels per day production.
• Operating cost - $9/bbl – 2015*.
Source: Melbana Energy
Prospectively
• Along trend from producing Varadero oil field (>11 billion barrels Oil Originally in Place).
• MAY assessment has identified very significant prospective resource potential for light, high quality oil
in one of three oil plays in Block 9.
• Exploration potential of Block 9 recently upgraded by more than 50% to ~12 billion barrels of Oil-inPlace with Prospective Resources of 612 million barrels (unrisked Best Estimate, 100% basis). 9
Investment: Oil & Gas
Multi-billion barrel oil potential identified so far in just 1 of 3 oil plays
The Alameda Prospect (formerly I Lead) is
currently the highest ranked exploration target
in Block 9 PSC.
Alameda is a large structure located in the
western part of Block 9 and is in a similar
structural position to the Varadero field, the
largest oil field in Cuba, approximately 35km
away.
Alameda has an estimated chance of discovery
of 32% and recoverable volumes ranging from
3 – 214 million barrels, with a best estimate of
65 million barrels recoverable.
Source: Melbana Energy
* Refer to Melbana Energy website for Cautionary statement on Resources
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Investment: Oil & Gas
As of February 2017, LGC’s ownership was worth approximately
$3.5 million CDN.
Melbana Energy shares could be used to fund LGC and the expansion
of its Cuban business interests.
Significant blue sky potential
• Beehive Project in Australia has 4 global oil majors
reviewing farmin
• Massive Tassie Shoals LNG/Methanol Project
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Investment: Travel & Tourism
Travelwelcome Ltd. & The InCloud9 Group
• September 2015 - LGC acquired 40% of Travelwelcome Ltd., a private
company.
• One of a handful of companies with a Cuban government license, to
facilitate international visitations.
• Through its Havana office, Travelwelcome provides customized Cuban
travel experiences, plus conferences and special events (ex. Cigar & Film
Festivals).
www.incloud9.com
• November 2015 – LGC finalized the merger of Travelwelcome and
InCloud9, a Cuban music, TV and film industry specialist. Now IC9 does
tourism and USA film and documentary production in Cuba.
• LGC has a 40% interest in the combined entity.
• Currently cash flowing.
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Joint Venture: Cuban Sports
Strategic Alliance – Rushmans Limited
• April 2016 - LGC signed a 50/50 joint venture with Rushmans to promote
Cuban sporting opportunities and attract world class events to the country.
• Under the terms of the Joint Venture Agreement, Rushmans will grant the
Rushmans JV an exclusive license to use the Rushmans’ brand and
intellectual property in respect to Cuban sporting opportunities.
• Revenues will flow from TV rights, co-production, merchandising and
advertising.
• Rushmans has managed more than 500 major sporting events in over 30
countries, including bringing the World Cup soccer tournament to South
Africa in 2014.
www.rushmans.com
• Cash flow started Q4 2016.
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Joint Venture: Import/Export
Groombridge Trading Corp. (GTC)
• November 2015 - LGC signed a 50/50 joint venture agreement with
Cuban-centric trading company Groombridge Trading Corp (GTC).
• Established in 2013, GTC is a Canadian corporation that holds approvals
from the Cuban Ministry of Foreign Trade and Investment, the Ministry of
Agriculture and is authorized to trade with other Cuban Government
entities.
• The GTC JV will grow the existing provision of products, machinery and
equipment to the Cuban tourism sector.
• In addition to growing GTC’s current trading activities, the GTC JV is
developing a series of agricultural projects to increase future exports to
Europe and Canada.
• Cash flow started Q3 2016.
www.gtcorp.ca
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Investment: Citrus Agri + Processing
• September 2016 - the Groombridge JV signed a letter of intent
with Cuba’s Empresa Agro Industrial Victoria de Giron (EAIVG),
part of the Ministry of Agriculture.
• The GTC JV will assist in the development and regeneration of the
largest citrus producer in Cuba with the aim of increasing the
country’s citrus and juice production.
• EAIVG is situated 130 kilometres east of Havana and the overall
project covers some 120 square kilometres with 35,000 hectares
under production and is the largest agricultural enterprise in Cuba.
• The GTC JV will work with and assist EAIVG access new investment
funding and bring assistance to improve operational aspects such
as growing and processing technology, marketing and exports.
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Investment: Cuban Coffee
Cuba Mountain Coffee Company (CMC)
• June 2016 - LGC Capital acquired a 10% interest in CMC.
• CMC has agreements to globally promote, single-origin gourmet coffee from
Cuba’s famous “Guantanamo Region”, both as green beans and also via
CMC’s premium coffee brand, “Alma de Cuba”.
• January 2017 – CMC agreed to contract terms with the Cuban Government
owned Asdrubel Lopez, the main processor of coffee in Guantanamo
province.
www.almacuba.com
• Late last year CMC signed an Memorandum of Understanding with Nestle’s
Nespresso. As a result Nespresso have committed to purchase a large
proportion of the Cuban coffee resulting from this project.
• The first coffee is expected to be exported by the end of 2017.
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Capital Structure
LGC Capital Ltd.
Shares Issued:
234,045,328
Exchange:
TSX Venture (TSXV)
Ticker Symbol:
QBA
Status:
Tier-2 Investment Issuer
Website:
www.lgc-capital.com
Offices:
Havana, London,
Toronto, Australia
(Operations and Investments)
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Management & Board of Directors
John A.D. McMullen
Anthony Samaha
David Lenigas
Mazen Haddad
Rafi Hazan
Guy Charette
Sebastien Bellefleur
CEO
CFO
Joint Chairman
Joint Chairman
Secretary
Independent Director
Independent Director
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Contacts
LGC Capital Ltd
Canadian Office:
Address:
Contact: Rafi Hazan
Phone:
800 Place Victoria, Suite 3700, Montreal, QC, Canada
Secretary and Director
(514) 839-7234
UK Office:
Address:
Phone:
Suite 3B, 38 Jermyn Street, London, SW1Y 6DN, United Kingdom
+44 (0) 20 7440 0640
Investor Relations:
Contact: Dave Burwell
Phone:
Email:
VP Investor Relations, The Howard Group
1.888.221.0915
[email protected]
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The Cuban Business & Strategy
• LGC’s objective is to acquire stakes in one or more listed or unlisted projects,
businesses, joint ventures, production agreements or companies (in whole or in
part), creating a platform for possible further acquisitions in sectors where the
opportunity exists to create value for LGC’s shareholders.
• It is intended that LGC will invest and acquire an appropriate percentage holding,
possibly including management of a company or companies and businesses with
part or whole connections or relationships to Cuba’s oil and gas, agribusiness,
manufacturing, industrial, transport and logistics, biotech, construction,
utilities, business services, support services, retail and/or tourism sectors.
• In line with its investment policy, LGC currently holds the following investments
and has entered into the strategic alliance and joint ventures set out below:
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Cuban Focused Investment Company
LGC Capital is unique!
• Public Company totally dedicated to Cuba.
• All partners are well established in Cuba.
• Foreign companies – lengthy processes to establish business in Cuba.
• LGC’s businesses have fully operational offices in Havana.
• Highly experienced “on the ground” Cuban expertise.
• Relationships with many Government entities.
• Massive potential to acquire and grow in many sectors.
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Cuban Focused Investment Company
LGC Capital Limited
• Only Public Company totally focused on investing in “Cuba”
• Multi Strat (conglomerate style) Investing Company
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Oil
Bespoke Tourism/Conferences/Events/Film Production
Import/Export
Sport
▪ Coffee
▪ Renewable Energy
▪ Cognition – Making things happen in Cuba for Foreign Companies
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Joint Venture: Renewable Energy
Commercial Funded Solar World (CFS)
• May 2016 – LGC JV with Commercial Funded Solar Ltd.
(“CFS”), a United Kingdom solar power and storage specialist.
www.cfsolarworld.com
• The JV will assess the potential for installing and operating renewable energy and hybrid power
solutions (solar power, energy storage and integrated power management systems) in Cuba.
• CFS is a multi-national company with operations in the United Kingdom, Africa and South
America. It specializes in the installation of medium-sized, commercially-funded renewable
power and storage systems.
• Under the terms of the agreement, CFS and LGC will share on a 50/50 basis the development,
funding and construction revenues for each renewable power plant built, and share on a 75/25
basis the 10-20 year operational contracts for all the systems.
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