While the topic has been adequately addressed above by the like of Poverty Boy and JID.
Heres my 2c worth because this very topic is the crux (or should I say crutch), of DGR, and needs to have a rounded understanding.
Havn’t posted in a while so am bound to digress.. bear with me.
Don’t follow DHR closely, but was glad they removed themselves from responsibility over that foray into the power industry (Argentina) and seem to be footing it on their own, and still the substantial wildcard in LKO holding – prime example of Mathers Maneuvering. Some great new resource potential and a following body of investors influencing the SP. Watch this space.
Recently I posted how I had elected to invest in ANW directly as opposed to via the mothership (DGR), this turned out to be a financially sound decision having paid me tax out of it and free carrying a bag and a half.
Auburn Resources: Would I buy that on listing ? not on your nelly based purely on History. These new listings cost DGR a mint, don’t return anything for an age and generally depreciate from the listing price with the shareholder suffering substantial dilution along the way.
To balance the scale though, Listings like Auburn (and remember DGR holders stand to get a special entry point ?), can provide great opportunities for those with time and money up their sleeves. The opportunity to get in at ground level, making a hedge that history does not repeat, which if it does can be averaged down on, allowing over time to accumulate a substantial holding at a beneficial price…my personal opinion is this would be a 5 year plan/investment before the fruits of your toil emerge.
Which brings to AJQ. In Production, LKO wildcard up its sleeve, previously been the subject of Corporate action which reflected directly to the DGR share price, Holding some great assets with what appears to be softening legislation which could allow the unlocking of great value. Watching this one closely and consider it undervalued.
This brings us to IRR, one of our market darlings which is doing surprisingly well - bucking the DGR trend as investors are seeing value in the presence of lack of production and corporate action , mentioned LKO being a wildcard for AJQ and DHR – well I consider IRR the wildcard of DGR. Originally listing ( and still holding the resource) as a substantial Iron ore holder, it soon became apparent the money was not in Iron at the time and the cornerstone shareholder let it slip that the iron mine was to be effectively land banked for 10 years.. slump goes the share price ( as mentioned, typical of DGR new listings) until digression into the Mathers knitting of minerals, minerals and more minerals came to the fore which has IRR in the healthy position it enjoys today.
And no Summary is ever complete without a spiel on SOLG, which will bring me back on focus with the topic . SOLG the behemoth Cu/Ag porphyry with half if not all the mining worlds eyes on it. Without going back in my notes, I believe major shareholder Newcest Mining was paying 43pps at which point on time this reflected in DGR by increasing the sp from sub 4c mid 2016 to a peak of 15/16c inside 12 months. Compare the charts if you don’t believe me – see below.
If the link fails, the detail is in the following thumbs, Summarised as follows.
“Invested” in DGR Directly for the period, my investment would have decayed by 63%.
“Invested” into the Subs (equal holding of shares in each), my investment would have decayed by 35%.
“Invested” in the subs based on the weighted holding of DGR, my investment would have decayed 16% .
None of the above scenarios are very attractive huh?
The data was analysed for the period Apr ‘12 to Mar ’14 – of course the data would have to be re run to reflect current day conditions, but remains a guide for my thought pattern/DGR investment strategy which will be outlined below.
Now,
Do I think I could take another bag out of ANW ? – Yes. Easily.
Will I be buying more ANW shares anytime soon? – No.
Why?
DGR is currently 9cps (and lets forget about NTA – I stopped calculating that years ago, while it remains of interest and I value notifications of its current value – for my investing approach it is irrelevant).
So at 9cps, and a proven 15c (if/when SOLG hits 43pps again), we already have 66% upside, and I believe we will see SOLG north of 43pps.
AJQ has value /income, ANW in production with great ground to be exploited.
IRR is holding its own and I consider a valued wildcard. I (Personally) do not believe IRR is reflected in the DGR SP at all yet, so given DGR has a 24% holding, which roughly equates in value to ½ that held in SOLG, I consider some corporate action in the IRR domain will add well in excess of 6 cps to DGR.
So with some further maturity of IRR and SOLG we have a DGR SP of min 21cps.
AJQ/ANW and SOLG all jostle for position for the top spot in Phase 5 of the DGR model – Development/Corporate takeover/ Payment of dividends. This reinforces to me that AJQ and ANW are also prime takeover targets with ability to positively impact the DGR SP.
DGR also has the Tribeca vote of confidence, LKO verdict to be announced, immenent Auburn listing, with the highly prospective Kanwataba Block / Pinacle Gold / Coolgarra Minerals and Albatross Bauxite sitting in the wings.
As mentioned we havn’t had a substantive announcement for a while. Based on the above, I suspect we stand to get a number of them in quick succession , and I want to be a part of that.
As a result, I have increased my holding by 10% during this sub 9cps phase.
I am hoping to free some capital to invest further because I consider a SP for DGR of 27cps is not unreasonable soon - that’s 2 further bags from 9cps now, in a relatively de risked stock that is well hedged against further doiwnside.
Buying shares also avoids having my holding diluted.
In a long winded way I hope this adds food for thought to the DGR Vs DHR question
My BUY DGR sentiment is maintained for the above reasons.
DGR Price at posting:
9.0¢ Sentiment: Buy Disclosure: Held
(20min delay)
