Cash flows, page-25

Mon 13 Mar 2017

I posted my last post under the title "Cash Flows" namely, that, IF DGR Global sold their marketable securities ie SOLG & IRR [London listed subs], it would bring in A$158.72 million vs A$78.68 million [DGR Market Cap].

For any Resource Factory [Explorer etc] or Mining Investment Trust [say] it appears to be in a good place if the 2 subs can bring into Treasury some A$158m.

If it is a Mining Investment Trust, they do not do any exploration so they have to look for new investments that can hopefully grow. In the case of DGR Global, they are running on a relatively large cash balance in the Balance Sheet if they realised the gain. This is always a good place to be in. This is from the Finance view point only. An Inflection point.

THE NEXT STEP
Both the SOLG & IRR subs are not yet at the stage of their fullest potential at this stage of the mining cycle etc.

From the view point of the shareholder, I take the point that over 15 years, there is a marked difference. However, this subject matter is one of how a shareholder manages their positioning. This is common to all stocks and is dependent on the shareholder as to what the research is saying at the time.

Solg came to my notice at the low point of around 2 British pence. I got an email from Investors Chronicle and I decided to research it further. A placing took place at 1.5p from recall. The market cap was around £8m vs £500 m+ today. This was the start of the Cascabel Ecuador project then.

At the time, an Australian poster in London pointed out DGR Global and said that it was the parent co. That was how I came to DGR Global to find out more about Solg, their sub from the ANN*s. DGR Global then was around the 1. 5 cents range.

BUY,HOLD,SELL
At every stage, the decision is one for the shareholder and it is not by any means an easy one.

Why?

It depends on how much the % of discount the individual shareholder would require etc. Also, the rate of potential growth also determines expected future pricing. If one can do this to a degree of accuracy of + or - 5% variance, then, one has read or sized up the investment correctly.

That requires far more research and pricing calculations. I think that in the case of exploration co*s, the accuracy of valuation is important but different shareholders will have different calculations based on what they have researched.

I do not research heavily into the other subs so I would not be in any position to even take a guess. My only knowledge is that of Solg in the main.

Lastly, I read of a poster on the London forums many years ago that both he and his wife worked for a very major listed bank. Every bit of their bank saving scheme was put into their bank*s shares. At the height, the shares were priced at £6.50 and at the height of the financial crisis a low of 15 pence. If the govt did not rescue the bank, then it would simply have disappeared like those in the last financial crisis. Today, the bank*s shares are around the 68p range. I think this case in point illustrates the shareholder*s dilemma at every point. Hence, the bank did not go under with financial injection of cash. That is always a good place to be in. Today, the bank has recovered and has had "growth". However, at no point did the couple sells their shares. This holder posted at the time the price was around 15p.

Sol1 13 March 2017