DGR Global Limited (ASX:DGR) CEO, Nick Mather discusses the company’s exploration company portfolio and their prospectsDGR Global Limited
(ASX:DGR) is a resource creation company. We make large resource companies; they all start from very early stage exploration ideas. We don’t buy other people’s projects; we start from scratch using great geoscience. We have fantastic people that have lots of experience, think laterally and are highly qualified technically.
We think big. We always have a very very large tenure position and that excludes competition. Focuses capital attention on us and draws the care and attention of local State and federal governments, to help get our project away. We also like going to what we call the yellow light countries, and they are countries that are putting a lot of effort into developing a resource development industry. So places like Ecuador, Chad, Gabon, Argentina are all countries that we believe are greatly assisting the mining and the oil and gas exploration industries, and we like them.
DGR Global has a portfolio of companies that are listed at the moment. In England on the AIM Exchange that’s part of the London Stock Exchange, we have SolGold PLC (LON:SOLG) and IronRidge Resources Limited (LON:IRR). On the ASX, we have Armour Energy Limited
(ASX:AJQ), Dark Horse Resources Limited
(ASX:DHR) and Aus Tin Mining Limited
(ASX:ANW). The most valuable in market cap terms at the moment is SolGold, listed on AIM in London with a huge tier one copper gold porphyry discovery in northern Ecuador, on the Andean copper belt. The most prolific copper belt in the world and we discovered this thing from scratch.
It’s taken us three years to cover 50 square kilometres of prospective ground with aero magnetics, geochemistry. Drilled 28,000 metres of holes, of which 95 per cent have hit the ore body because it’s enormous. So, we now have a 15 per cent interest in SolGold and this company has a market cap of £560 million sterling. So it’s over a $100 million asset for DGR Global and a fantastic asset that still has a lot of room to grow. And we’re replicating the blueprint that was so successful, discovering the Cascabel Alapala deposit across the rest of Ecuador.
The next thing that everybody should really keep a close eye on, and because we think it will ultimately emulate the development and growth of Arrow Energy Limited
(ASX:AOE) many years ago, is Armour Energy, in which DGR has a major shareholding and a great position in convertible notes. We believe that Armour is on the cusp of redeveloping one of Australia’s great oil and gas fields on the Roma shelf, in southern Queensland. We also have some world-class basins that were attested to by American Energy Group Limited (OTCMKTS:AEGG), before its demise in Northern Territory and north Queensland. So lots of tremendous upside for Armour Energy and that’s going to really deliver for DGR Global.
We also have a dominant position as one of the three largest shareholders, alongside Assore Limited (JSE:ASR) and Sumitomo Corp (FRA:SUMA) in IronRidge Resources. IronRidge is applying the DGR central tenants of exploration, which is to have a massive land position. And also be exploring for really great commodities, in this case it’s high grade gold. And some unexplored terrains in Chad and Cote d’Ivoire in Africa.
We also have a very large position in Aus Tin, which is mining tin in northern Tasmania and soon to be developing one of the world’s largest undeveloped tin resources, in northern New South Wales. And Dark Horse Resources is the baby foal of our stable. And that is working on a very large power station development in Argentina, to assist with the solution to Argentina’s power problems. So all of these projects are massive in the daughter companies. DGR’s position in the daughter companies is large or dominant and we have experts working on the discovery of tier one assets, in all of these companies.
We don’t take a stake in the junior explorers, we set them up from scratch, so we don’t buy anything. The last one that we created and sold was Orbis Gold Limited
(ASX:OBS) and DGR’s cost base in Orbis was one dollar. And I think that was for accounting expediency. We set these things up from scratch, so big tenement position looking for a commodity that the world has to have to maintain civilisation. We use expert technical people, who are the mainstay of our exploration effort. And we use state of the art geophysical and geochemical techniques, to identify patterns in data that lead us to ore bodies.
The company has net tangible assets that are all listed stocks in companies with pretty good turnover, like SolGold and Armour. And we have $150 million worth of net tangible assets and a market cap of only about $65 million. So we have plenty of growth left in us yet, on the basis of our existing assets and access to as much cash as we need, from the sale of very small positions in any of those companies. We’ve always seen DGR Global as a resource company factory. It’s something that we can reliably and dependably generate new resource companies in. Orbis Gold was one, SolGold is another, Armour’s another and we can just create these things and fill up a pipeline, like the production line in a car factory.
And we want to see DGR Global recognised as a business that does this and some value put on that strategy, rather than a discount being put on the assets that we hold from time to time. So at the moment, we’re trading at around about 45 per cent of the NTA. We think that’s too low and we’d like to see ourselves trading at a premium to NTA, which would help put us somewhere over about 35-40 cents a share. So that’s the aim, we just need to convince people that we do this very reliably.
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