Pinetree Capital Ltd.

Pinetree Capital Ltd.

November 12, 2007 17:33 ET

Pinetree Capital Ltd. Announces Results for the Three and Nine Months Ended September 30, 2007

TORONTO, ONTARIO--(Marketwire - Nov. 12, 2007) - Pinetree Capital Ltd. ("Pinetree") (TSX:PNP), a Canadian investment company, today announces its unaudited results for the three and nine months ended September 30, 2007.

During the third quarter, Pinetree realized a net loss on disposal of its investments totaling $3.0 million, as compared to a net realized gain of $14.8 million in the same quarter last year. For the nine months ended September 30, 2007, Pinetree generated realized investment gains of $170.5 million as compared to $53.9 million in the same period last year.

Pinetree had a net investment loss in the third quarter of $140.2 million, including unrealized losses on investments of $137.1 million, as compared to net investment gains of $54.4 million in the third quarter of fiscal 2006. Unrealized losses of $137.1 million for the three month period ended September 30, 2007, are comprised of $62.2 million in reversals of prior period recorded unrealized gains and a $74.9 million write-down of our investments to fair value as at September 30, 2007. In the nine months ended September 30, 2007, the net investment loss of $103.9 million ($134.8 million net investment gain in the nine months ended September 30, 2006) includes net unrealized losses on investments of $274.5 million. The net unrealized losses during the nine month period were primarily from the reversal of prior period recorded unrealized gains of $199.5 million and by a $75.0 million net write-down to fair value on our investments.

The composition of Pinetree's investment portfolio as at September 30, 2007 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:

September 30, 2007 June 30, 2007 December 31, 2006
Fair Value % of Fair Value % of Fair Value % of
Sector ($'000) Total ($'000) Total ($'000) Total
Precious Metals 193,943 36.6 281,610 34.7 179,076 32.4
Uranium 131,674 24.9 211,118 26.1 187,881 34.0
Base Metals 69,825 13.2 108,274 13.4 34,894 6.3
Oil & Gas 43,495 8.2 77,413 9.6 77,848 14.1
Molybdenum 24,780 4.7 42,604 5.3 -- --
Total Resources 463,717 87.6 721,019 89.1 479,699 86.8
Biotechnology 11,452 2.1 18,554 2.3 10,958 2.0
Energy Related
Technology 8,445 1.6 10,443 1.3 20,284 3.7
Technology/Other 46,017 8.7 59,015 7.3 41,436 7.5

Fair value of investments at the end of the third quarter stood at $529.6 million as compared to $809.0 million as at June 30, 2007 and $552.4 million at December 31, 2006. The number of investments decreased to 467 from 509 at the end of the last quarter, up from 298 as at December 31, 2006. Of these 467 investments, 408, or 87.4% (June 30, 2007 - 87.8%), were in the resource sector, reflecting Pinetree's continued focus on the resource market. Offsetting the decline in fair value of investments is a decline in liabilities from $315.2 million at June 30, 2007 to $126.3 million at the end of September.

Net loss in the third quarter was $92.3 million ($0.93 per basic share) versus net income of $37.4 million ($0.44 per basic share) in the third quarter of 2006.

Net loss for the nine months ended September 30, 2007 was $89.4 million ($0.96 per basic share) as compared to net income of $85.4 million ($1.11 per basic share) for the nine months ended September 30, 2006.

Net asset value per share decreased to $4.05 as at September 30, 2007 from $4.97 as at June 30, 2007 and $4.24 as at December 31, 2006.

"August was a difficult month for global financial markets as a result of credit issues primarily in the United States," commented Sheldon Inwentash, Chairman and CEO of Pinetree Capital. "However, our investment strategy has fundamentally not changed. We maintain a very positive outlook for resources and commodities, driven largely by growth in Asia and India. We think that the recent decline in the market values of the junior types of resource companies that we invest in, together with the recent completion of a $72 million financing, represents an attractive investment environment for us."

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 resources sector: Uranium, Oil & Gas, Molybdenum, Precious Metals and Base Metals. Pinetree's investment approach is to build a macro position in a sector, find the micro-cap opportunities in 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

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 the Company 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 Statements

This new release contains forward-looking statements, which are statements relating to future events or Pinetree's future performance and which are inherently uncertain. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are 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 statements in this new release include statements in respect of Pinetree's investment strategy, outlook regarding investment opportunities and expectations regarding future demand for resources and commodities.

Forward-looking statements involve 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 statements. Pinetree believes the expectations reflected in those forward-looking statements are 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 statements 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 statements 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 investments' interests are located and other risks included in the Company's annual information form for the year ended December 31, 2006 and other public disclosure documents filed with certain Canadian securities regulatory authorities and available at 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 statements, there may be other factors that cause events or results to differ from those intended, anticipated or estimated. The forward-looking statements contained in this news release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as otherwise required by law. All of the forward-looking statements contained in this news release are expressly qualified by this cautionary statement.

Contact Information

  • Investor Relations: Pinetree Capital Ltd.
    Larry Goldberg, C.A.
    Executive Vice President and Chief Financial Officer
    (416) 941-9600
    Media Relations: Pinetree Capital Ltd.
    Wanda Cutler
    Director of Corporate Communications
    (416) 860-1717