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Pinetree Capital Ltd. Announces Results For The Three Months And Year Ended December 31, 2007


March 14, 2008

  • Company generates realized gains of $20 million in quarter and $191 million for the year.
  • Net asset value per share grows in quarter to $4.20.

TORONTO, Ontario (March 14, 2008) – Pinetree Capital Ltd. (“Pinetree”) (TSX: PNP) today announces its results for the three months and year ended December 31, 2007.

During the fourth quarter, Pinetree realized a net gain on disposal of its investments totaling $20.3 million, as compared to a net realized gain of $40.3 million in the same quarter last year. For the year ended December 31, 2007, Pinetree generated realized investment gains of $190.8 million as compared to $94.3 million last year.

Pinetree had net investment gains in the fourth quarter of $11.9 million, including unrealized losses on investments of $13.9 million, as compared to net investment gains of $156.5 million in the fourth quarter of fiscal 2006.  Unrealized losses of $13.9 million for the three-month period ended December 31, 2007, are comprised of $16.3 million in reversals of prior period recorded unrealized losses and a $30.2 million write-down of our investments to fair value as at December 31, 2007. During the year ended December 31, 2007, the net investment loss of $92 million (versus $291.3 million net investment gains in 2006) includes net unrealized losses on investments of $288.3 million. The net unrealized losses during fiscal 2007 were comprised of the reversal of prior year recorded unrealized gains of $183.1 million and by a $105.2 million net write-down to fair value on our investments.

The composition of Pinetree’s investment portfolio as at December 31, 2007, including both investments at fair value and equity accounted investments, as compared to the end of the prior quarter and the end of the Company’s previous financial year is outlined in the following table: 

 

December 31, 2007

September 30, 2007

December 31, 2006

Sector

Fair Value ($’000)

% of Total

Fair Value ($’000)

% of Total

Fair Value ($’000)

% of Total

Resources:

 

 

 

 

 

 

        Precious Metals

240,479

39.3

193,943

36.6

179,076

32.4

        Uranium

118,384

19.4

131,674

24.9

187,881

34.0

        Base Metals

72,874

11.9

69,825

13.2

34,894

6.3

        Molybdenum

50,506

8.3

24,780

4.7

--

--

        Oil & Gas

45,543

7.4

43,495

8.2

77,848

14.1

        Potash and Rare Earths

17,052

2.8

--

--

--

--

Total Resources

544,838

89.1

463,717

87.6

479,699

86.8

Technology/Other

43,360

7.0

46,017

8.7

41,436

7.5

Energy Related Technology

11,996

2.0

8,445

1.6

20,284

3.7

Biotechnology

11,400

1.9

11,452

2.1

10,958

2.0

Total investments, including investments at fair value and equity accounted investments, at December 31, 2007 stood at $611.6 million as compared to $529.6 million as at September 30, 2007 and $552.4 million at December 31, 2006. The number of investments increased to 487 from 467 at the end of the last quarter, up from 298 as at December 31, 2006.  Of these 487 investments, 432, or 88.7% (September 30, 2007 – 87.4%), were in the resource sector, reflecting Pinetree’s continued focus on resources.

Net loss in the fourth quarter was $2.2 million ($0.02 per share) versus net income of $97.7 million ($1.14 per share) in the fourth quarter of 2006.

Net loss for the year ended December 31, 2007 was $91.6 million ($0.94 per share) as compared to net income of $183.1 million ($2.31 per share) for the year ended December 31, 2006.

Net asset value per share increased to $4.20 as at December 31, 2007 from $4.05 as at September 30, 2007 and a decrease from $4.24 as at December 31, 2006.

“The second half of 2007 was a challenging period for investors as global financial markets experienced a significant degree of turbulence and instability,” commented Sheldon Inwentash, Chairman and CEO of Pinetree. “Although there was a general weakening in commodity prices, our outlook for resources and commodities remains positive overall, driven largely by continued growth in Asia and India. While we expect some degree of instability in the markets to continue in the near term, we continue to believe in the strength of our long-term investment strategy – finding suitable early-stage companies in the particular sectors we have identified, with a view to achieving primarily longer-term capital appreciation. After doubling our realized investment gains in 2007 (over 2006), we have now reallocated much of our investment proceeds into new early-stage and junior resource companies and we look forward to the execution of their business plans by them.  We also continue to assess new sectors within the resource market, such as potash and rare earths, which represent compelling value propositions consistent with our overall strategy.”

About Pinetree
Pinetree Capital Ltd. ("Pinetree") was incorporated under the laws of the Province of Ontario and its shares are publicly traded on the Toronto Stock Exchange under the symbol “PNP”. Pinetree is a diversified investment and merchant banking firm focused on the small-cap market.  Pinetree’s investments are primarily in the following resources sectors: Uranium, Oil & Gas, Molybdenum, Precious Metals, Potash and Rare Earths, and Base Metals.  Pinetree’s investment approach is to build a macro position in a sector, find the micro-cap opportunities within that sector and work with those companies to build them to commercial production and create an exit.

For more details about Pinetree and its investments, please visit our website at www.pinetreecapital.com.  

Use of Non-GAAP Measures
“Net asset value per share” is a non-GAAP measure defined as shareholders’ equity divided by the total number of common shares of Pinetree outstanding.The term net asset value per share does not have any standardized meaning according to GAAP and therefore may not be comparable to similar measures presented by other companies.We believe that the measure provides information useful to our shareholders in understanding our performance, facilitates the comparison of the quarterly and year-end results of our ongoing operations and provides a meaningful measure to evaluate our business relative to that of our peers.

Cautionary Note Regarding Forward-Looking Information
This new release contains forward-looking information, which is disclosure relating to possible events, conditions or results of operations of Pinetree, which is based upon assumptions about future economic conditions and courses of action and which, by their nature, are inherently uncertain.  All information other than statements of historical fact may be forward-looking information. Forward-looking information is often, but not always, identified by the use of words such as “seek”, “anticipate”, “budget”, “plan”, “continue”, “estimate”, “expect”, “forecast”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe” and similar words or phrases (including negative variations) suggesting future outcomes or statements regarding an outlook.  Forward-looking information in this new release includes statements in respect of Pinetree’s investment strategy, outlook regarding investment opportunities and expectations regarding future demand for resources and commodities and the state of financial markets.

Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information. Pinetree believes the expectations reflected in the forward-looking information is reasonable but no assurance can be given that these expectations will prove to be correct and readers are cautioned not to place undue reliance on forward-looking information contained in this news release. Some of the risks and other factors which could cause results to differ materially from those expressed in the forward-looking information contained in this release include, but are not limited to: risks relating to investment performance, market fluctuations, fluctuations in prices of commodities underlying our interests and equity investments, the strength of the Canadian and US economies, foreign exchange fluctuations, political and economic conditions in the countries in which the Company’s investment’ interests are located and other risks included in the Company’s current  annual information form and other public disclosure documents filed with certain Canadian securities regulatory authorities and available at www.sedar.com under Pinetree’s profile.

Readers are cautioned that the foregoing lists of factors are not exhaustive. Although Pinetree has attempted to identify important factors that could cause actual events and results to differ materially from those described in the forward-looking information, there may be other factors that cause events or results to differ from those intended, anticipated or estimated.  The forward-looking information contained in this news release is provided as of the date hereof and Pinetree undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as otherwise required by law. All of the forward-looking information contained in this news release is expressly qualified by this cautionary statement.

Investor Relations:
Larry Goldberg, C.A.
Executive Vice President and Chief Financial Officer
Pinetree Capital Ltd.
130 King Street West, Suite 2500
Toronto, Ontario, Canada, M5X 1A9
Phone: 416-941-9600
Email: ir@pinetreecapital.com
Web Site: www.pinetreecapital.com

©Copyright 2012 Pinetree Capital Ltd.