Item 5 Fees and Compensation
Fees. The Firm, or an affiliate of the Firm, receives compensation from a client based both on the
percentage of assets we manage and on performance achieved for a client’s account. Generally, each
year, we charge investors in the feeder funds to Segra Resource Partners, LP an asset-based
management fee of between 1.0% and 1.75% of the assets that we manage, and performance-based
compensation of between 10% and 20% of profits. For Segra New Energy Opportunities I, LP, we
generally charge investors an annual management fee between 1% and 2% and an affiliate is entitled
to between 20% and 25% of any investment profits. For Segra XE 1, LP, we generally charge investors
an annual management fee of 1%. For Segra XE 2, LP we generally charge investors an annual
management fee of 1% and a performance-based fee of 10% of profits. Segra AE 1, LP we generally
charge investors an annual management fee of 1.5% and a performance-based fee of 20% of profits.
For Segra Resource Partners, LP, a high water mark ensures that we only receive performance
compensation when a Client’s account value is greater than its previous greatest value (reduced pro
rata by any withdrawals or redemptions of capital by an investor). Should the account drop in value,
then it must exceed the previous greatest value before we can receive performance compensation
again.
Negotiation of Fees; Waivers. Fees are generally not negotiable, but under certain circumstances (such
as the size of an investment in a client, the overall amounts allocated to the Firm for management or
the extent to which a client or an investor in a client offers strategic opportunities or benefits to the
Firm), we have, in our discretion, waived all or a portion of our asset-based management fee and/or
the performance-based compensation for certain investors in our Clients.
The Firm and its affiliates do not pay asset-based fees or performance-based compensation.
Method of Payment of Fees. We deduct the asset-based management fee described above quarterly from
a Client’s account at the beginning of each quarter. F o r Segra Resource Partners, LP, we also deduct
our performance-based allocation described above from the Client’s account at the end of each year or
when an investor in the Client makes a withdrawal or redemption (but only for the amount withdrawn or
redeemed). For Segra New Energy Opportunities I, LP and Segra XE 1, LP, the Fund’s Special Limited
Partner is immediately entitled to its performance-based allocation of all distributions (in cash or in kind,
in accordance with Fund Governing Documents) so long as all contributed capital has previously been
returned to each Limited Partner in the Fund.
Client Operating Expenses, Including Brokerage and Other Transaction Costs. In addition to the
compensation payable to the Firm described above, each Client pays, or reimburses the Firm or its
affiliates for, its own ongoing direct offering, investment, administrative and operating expenses. F o r
Segra New Energy Opportunities I, LP and Segra XE 1, LP, such expenses are capped at 0.25%
annually of the amount of the aggregate Unreturned Capital Contribution Balances of the Limited
Partners, excluding the Management Fee. The list below details some of these expenses, but does not
include every possible expense a Client may incur.
• legal, accounting, administration, including administration fees, insurance, auditing,
consulting, including regulatory and information technology consulting, and other professional
expenses;
• all expenses related to the offering of interests in a Client, including legal fees relating to the
preparation of offering materials;
• investment expenses such as commissions, research expenses, including research-related travel
expenses, interest on margin accounts and other indebtedness;
• custodial fees and other reasonable expenses related to the purchase, sale or transmittal of
assets;
• telephone, computer and other communication expenses; and
• any other expenses which we reasonably determine to be directly related to the investment of
our client’s assets.
The trading program utilized on behalf of Segra Resource Partners, LP generates high levels of
portfolio turnover. Therefore, we expect transaction costs for this Client to be higher as a percentage
of equity than those of other private investment funds. For more information on brokerage transactions
and costs, please see Item 12: Brokerage Practices.
Pre-Payment of Fees. Segra Resource Partners, LP pays the asset-based management fee that we
receive quarterly in advance. As a result of limitations on withdrawals from the Fund, management
fees will in almost all cases have been earned at the time of withdrawal. In the unusual situation in
which (i) an investor withdraws from the Fund, (ii) the Fund terminates its operations or (iii) one of
the Fund or our Firm terminates the investment management agreement between them, in each case
prior to the end of a quarter, the asset-based management fee for the quarter in question will be prorated
for the number of days that (i) the investor held an interest in the Fund, (ii) the Fund was in operation
or (iii) the investment management agreement between the Fund and our Firm was effective, in each
case for the calendar quarter, and we will refund any unearned portion of the asset-based management
fee directly from our Firm to the Fund and the investor(s) in the Fund. For Segra New Energy
Opportunities I, LP, the Management Fee for a period of 24 months in advance shall be due and
payable upon the Fund’s consummation of the acquisition of securities of the Portfolio Company, and
any Management Fee thereafter shall be an expense of the Fund and continue to accrue and be payable
to the Firm prior to any distributions in accordance with Fund Governing Documents. For Segra XE
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