# LRF - LinQ Resources Fund



## dubiousinfo (2 August 2006)

I have been looking at LRF Linq Resourses Fund. It's an investment trust that invests in small to medium resourse stocks. SP is currently at $0.84 with NTA of $1.19

Seems to have investments in some very good prospects. Most seem to be either producing or very close to producing.

In addition they still have $46m in cash & have just declared a dividend of 7c per share.

At face value it would seem a way to get exposure to a variety of resourse juniors at a significant discount with a good chance of SP increasing to reflect the current value of the investments plus any increase in the SP of the stocks held.

Any thoughts?
What am I missing here?


Announcements

http://www.asx.com.au/asx/statistic...ssuerCode=lrf&timeFrameSearchType=Y&year=2006


Website

http://www.linqresourses.com


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## Alien (3 August 2006)

*Re: LRF - Linq Resourses*

They have $25.7m of unrealised ganis on their books. So there NTA after tax is somewhere around $1.145. Still a reasonable discount to there share price but they also have a heavy weighting invested in CopperCo of $27.6m (16.4%). 

Add some involvment in mezzanine finance activities and a heavy investment in resource stocks at a high cyclic peak then i can see the reason for the discount. 

They may do well if the resources bull continues. Prefering a more conservative diversified approach for a LIC there are too many risks at this stage for me to buy in. 

_My opinion only. Please use your own research before making a decision to invest or not._


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## dubiousinfo (5 August 2006)

*Re: LRF - Linq Resourses*



			
				Alien said:
			
		

> They have $25.7m of unrealised ganis on their books. So there NTA after tax is somewhere around $1.145. Still a reasonable discount to there share price but they also have a heavy weighting invested in CopperCo of $27.6m (16.4%).



I think you misunderstand re tax. This is a trust, so under present legislation it is not liable to pay tax so long as it distributes all taxable income to the unitholders each year, which it has done & will continue to do. As for CopperCo, I personally dont see that as a negative and 40% of it is a covertable note.




> Add some involvment in mezzanine finance activities and a heavy investment in resource stocks at a high cyclic peak then i can see the reason for the discount.




They are completly invested in resource stocks. That is the appeal for me. I am looking to invest in small resource stocks & see this as a way of diversifying a small investment over a large number of stocks. Plus the stocks come at a discount to the current price I would pay if I invested in them directly. As to the high cyclic peak, I personally think resources still have some way to go & am happy to put the speculative part of my portfolio into them.




> They may do well if the resources bull continues. Prefering a more conservative diversified approach for a LIC there are too many risks at this stage for me to buy in.




This is not a low risk LIC investing in blue chips. This is for people who are already wanting to invest in resource stocks because they believe resources still have further to run. There are other LIC's for the conservative part of a portfolio. This is for the speculative part.


I still think this might be worth a spec buy, but would appreciate any other comments.


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## dubiousinfo (11 August 2006)

*Re: LRF - Linq Resourses*

The sellers seem to be disappearing. Sell side is very light ??


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## dubiousinfo (28 August 2006)

*Re: LRF - Linq Resourses*

This is finding some support today.
It has holdings in AGS, AVO & JML all of which have moved strongly over the last 2 weeks.


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## Portfolio (6 September 2006)

*Re: LRF - Linq Resourses*

The NTA is also further diluted by the fact that there is 1 option for every share.......provided the SP makes it to the strike price by Jan 07.


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## dubiousinfo (13 September 2006)

*Re: LRF - Linq Resourses*

NTA & SP have been increasing, NTA up 10% since June 30

NTA
30/6  $1.20
31/7  $1.29
31/8  $1.32

I now hold some of this. Jumped in & grabbed some 2 weeks ago.


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## Portfolio (14 September 2006)

*Re: LRF - Linq Resourses*

I have had a good look at this stock as well.

I think the options are the best way to play this stock as they are trading at a big discount to fair value as they are exchange traded options (LRFO).

I dont think the discount to NTA will close up unless there is a spike in commodities over the next few months but if this happens there might be a double effect of rising NTA and closing discount.  Under this scenario $1.20-$1.30 isnt out of the question making a 1000% return on the options.


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## NettAssets (14 September 2006)

*Re: LRF - Linq Resourses*



			
				Portfolio said:
			
		

> I have had a good look at this stock as well.
> 
> I think the options are the best way to play this stock as they are trading at a big discount to fair value as they are exchange traded options (LRFO).
> 
> .




These are not exchange traded options.
They are traded on the exchange - but as equities not as ETO's.
As over the counter options they do not have some of the safeguards that ETO's have.
They also have an excise price payable prior to expirey to convert them to shares that call ETO's don't have.
I am neither promoting or deriding the worth of buying them. Just correcting an error in terminology.
John


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## Portfolio (14 September 2006)

*Re: LRF - Linq Resourses*

How would this impact the price? Would ETO's be worth more?


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## NettAssets (14 September 2006)

*Re: LRF - Linq Resourses*



			
				Portfolio said:
			
		

> How would this impact the price? Would ETO's be worth more?




I was talking to WayneL about this a while back. I think the consensus was you should be able to use the same pricing model for a call ETO or a OTCO. the main difference is that with the OTC some of the value is payed on expirey so you haven't got that cost of carry during the life of the option. 
The execise price is basically the same in both options. They may react a little differently right at expirey and right at the money seeing as (as I understand it) there is usually no brokerage cost to exercise the OTC.
The liquidity will be rather different I would think as the ETO is basically a trading instrument and has the opposite put to form complex trades. while the OTCO is used more as a leverage into an investment position.

John
My opinion only with no references. 
I will be interested in others take on this


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## yogi-in-oz (10 October 2006)

*Re: LRF - Linq Resourses*



Hi folks,

LRF ... has been very strong, but will be looking
for highs, around:

    23102006 ..... minor intraday cycle

    30102006 ..... 2 significant and negative cycles here ...
                   ... finance-related ???

 02-03112006 ..... significant and negative cycle.

    22112006 ..... minor

    29112006 ..... minor

    12122006 ..... minor

 15-18122006 ..... minor and positive

 22-28122006 ..... 2 positive cycles here

    02012007 ..... minor and positive news???

    09012007 ..... significant and negative - finances???

Shooting for highs, around 1.49 ... ???

happy days

 yogi



=====


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## dubiousinfo (11 December 2006)

*Re: LRF - Linq Resourses*

NTA for this was $1.51 as at 30/11/06 with a SP of $1.06 today.
Has 130m $1.00 options which expire on 19/1/07 (currently trading at 3.2c). Announced last month that it was buying back 13m of its shares, has bought 4m so far, 9m to go (that's one way to get the SP up so options are converted).   
If all the options are converted NTA will be $1.26.
I currently hold shares for longer term but have traded in & out of the opies over the last few weeks for some good results and grabbed a few more today.


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## adobee (17 January 2008)

*Re: LRF - Linq Resourses*

I have become interested in Linq today following there change in substanial share holders notice on AGO Atlas as they seem to have sold $12million shares right on time on the 14th at $2 and can now get them back at $1.84 if they want to.. This change in share holding notice is where I have first seen them.. Looking at the web site they seem to be in alot of the companies which I too am interested in - exploring or near production ..
I am thinking it may not be a bad buy they are in the right stocks for me and have alot more time and information on hand to make good decisions..

Have people had positive or negative feelings in relation to managament.. ?


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## adobee (23 January 2008)

*Re: LRF - Linq Resourses*

Okay well I am in LRF now.. I am taking an uneducated punt. I like that it looks as though they sold out of alot of positions just before the crash and with the cash on hand I am hoping that they have been able to clean up.


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## adobee (13 February 2008)

*Re: LRF - Linq Resourses*

*LinQ Resources Fund announces 142 per cent increase in unaudited net profit to $116.89 million for the half year ended 31 December 2007*• 

Unaudited Net Profit attributable to unit holders more than doubles to $116.89m from $48.2million

• Earnings per unit increased by 43 per cent, despite the exercise of 83%of the options in January 2007
• Outlook positive for the resources market
• Net asset value of $476.9m at 31 December 2007


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## adobee (2 May 2008)

*Re: LRF - Linq Resourses*

I am not holding this currently .. but thinking it could be looking cheap as they are down substanially however hold almost 10% stake of AGO which is up 30% in last three days or 80% + since in the last two months...


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## imajica (2 May 2008)

*Re: LRF - Linq Resourses*

I agree that now is a good time to get Into LRF!

Their stake in AGO is looking very healthy at the moment and their profits just keep on growing!

Also the outstanding dividend yield doesn't hurt either. The guys who run the fund are ex-rothschild resource fund managers - they know what they're doing.


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## adobee (5 May 2008)

*Re: LRF - Linq Resourses*

Well I have jumped on some LRF this morning as the AGO increases have to be having a positive affect on their share price and earnings.. (I would think)


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## imajica (5 May 2008)

*Re: LRF - Linq Resourses*

the current value of their stock in AGO is:

18,428,851 shares x $3.70

= $68,186,748


This will influence the NTA result considerably! The NTA is usually posted after hours on Monday!  great news for LRF holders


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## adobee (5 May 2008)

*Re: LRF - Linq Resourses*



imajica said:


> the current value of their stock in AGO is:
> 
> 18,428,851 shares x $3.70
> 
> ...




You would be thinking they would have to be loving this.. sitting back in there office cheering every 5.4c up is $1 million dollars
(I think I have this right)


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## imajica (6 May 2008)

*Re: LRF - Linq Resourses*

18,428,851 shares x $4.07


$75,005,423


If people can't see the value in Linq now - they have made nearly 40 million in profit in the last two weeks off AGO alone!!!


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## chrissyoscar (7 May 2008)

*Re: LRF - Linq Resourses*



imajica said:


> 18,428,851 shares x $4.07
> 
> 
> $75,005,423
> ...




I purchased some today at $1.32.
It seems to have great potential and pays a good dividend.
I also own Atlas Iron (ago) which linQ is a heavy owner in and lacking any knowledge on what other 2nd tier resource stocks are cheap I decided linQ was the safest choice for me.
Any idea on how high the expectations are for this stock to go.
I see it has a 52 week high of $1.88, if it can repeat that I'm happy.


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## adobee (9 May 2008)

*Re: LRF - Linq Resourses*

I have set up a watchlist of LINQs main holdings thus I can watch what is happening from the looks of things Riversdale Resources which they also own has had great returns also ..


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## desolator (9 May 2008)

*Re: LRF - Linq Resourses*

Dioro Exploration NL (DIO) up 24% which LRF has a piece off the PIE off also.. really happy with the stock. I wish I had just bought more dammit >< .. things seem to be heading quite positively..


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## adobee (13 May 2008)

*Re: LRF - Linq Resourses*

NTA as at 30th April 2008 $1.99 up from last month of $1.84 considering AGO ran up a $1 since then one would think the current NTA must be somwhere around $2.12 ?


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## adobee (14 May 2008)

*Re: LRF - Linq Resourses*

Weekly NTA out up to $2.24 whoa.. onwards and upwards..
lf AGO holds its position things are looking very blue for Linq..


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## nizar (14 May 2008)

*Re: LRF - Linq Resourses*



adobee said:


> Weekly NTA out up to $2.24 whoa.. onwards and upwards..
> lf AGO holds its position things are looking very blue for Linq..




Hi Adobee,

What is more important for you, the NTA or the share price?
Serious question.

Nizar.


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## adobee (14 May 2008)

*Re: LRF - Linq Resourses*



nizar said:


> Hi Adobee,
> 
> What is more important for you, the NTA or the share price?
> Serious question.
> ...





The share price is most important until I am in a position to take over the companies chop them up and sell off the Assets.. as this is the only figure on which I am making any money..  however If a true NTA is provided and it is substantially higher than the current share price there is some indication of value..  ie I look at this and see a current NTA of $2.24 which says to me they have made a motza from the stock they own in the past few weeks eg the increases in AGO and in my mind these increases are not yet reflected in the LRF share price..  I dont expect the share price to trade inline with the NTA but if the NTA is substantially higher, there is a current good dividend, and I see blue skys for the stock in which they own then this gives me some comfort.. obvioulsy if I thought the stock they owned was going to go the other way even if the NTA is currently high I wouldnt be thinking as much..


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## Mitchy (29 May 2008)

*Re: LRF - Linq Resourses*

This fund is definitely under the radar and there still exists a deep deep discount to the NTA.

AGO has performed exceptionally, but l too have a watchlist of all other major holdings and they are performing very well.

You need to remember that the fund is a unit trust and therefore all profits are distributed to unit holders. Latest broker research indicates if the fund performs ok in June, they expect distributions of $35m, representing 21.7c per share (17% dividend yield !).  Low case is $20m (12.4c per share).

Tell me a better forecast yield going than this ?   Transfer your cash from ING now.


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## blablabla (31 May 2008)

*Re: LRF - Linq Resourses*



Mitchy said:


> This fund is definitely under the radar and there still exists a deep deep discount to the NTA.




Upcoming distribution looks like being 10% or more, and SP is at a huge discount to NTA. 

Agree that investors have overlooked this fund. This is a rare stock that currently offers high yield and very strong capital appreciation prospects. Risks are relatively low due to the spread of the fund investments. The only major risk would be an end to the resources boom, but if that were to happen then this would not be the only stock to be affected. So the bla3 rating on this stock is much higher than for the major resources stocks such as BHP and RIO.

Top 2 investments RIV and AGO represent over 40% of LRF's portfolio. These two companies are currently on major uptrends. With good indications for most of the other stocks in LRF's portfolio the SP outlook is upwards even if the discount to NTA remains at its current level.

If cashflows later in the year allow the share buyback program to recommence then this would be likely to push the SP even higher and reduce the current large NTA discount to more reasonable levels.


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## adobee (31 May 2008)

*Re: LRF - Linq Resourses*

Thinks looking very good -

RIV up around $11
AGO up around $4
SDL up around 37c
VCN up around 37c

and all getting good interest..

In regard to dividends and distributing profits, I assume that to make money aside from there actual loans out they have to actually trade in or out of the stocks so I expect a large % of the profit should actually be in the share price rather than just the dividend..


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## Mitchy (20 June 2008)

*Re: LRF - Linq Resourses*

Hi Guys,

Announcemnet just out.  Distribution will be 23.75c per unit. Wow !!  Very happy indeed.

This is a yield in excess of 16% -  not too late to buy more or get in - fund will trade ex-distribution on 24/6/08.

Perhaps the huge discount to NTA might finally contract.  I'm in for the long term with these guys.

Cheers,

Mitchy


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## adobee (24 June 2008)

*Re: LRF - Linq Resourses*

Pull off today a bit following dividend close off.. I didnt think so many people had bought in prior..

Anyone able to advise tax wise..
if buy in get 15% dividend then sell out 15% loss.. ?


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## adobee (3 July 2008)

*Re: LRF - Linq Resourses*

Fin review had best performers of 2007-2008 in street talk -
at the top of the list were :

Riversdale Mining  (somwhere around 250%)
Atlas Iron Ore

Looks like LRF are on the money with these picks which I think are there major two share holdings


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## adobee (12 June 2009)

*Re: LRF - Linq Resourses*

LRF has announced they plan to get more actively involved in their investments both trading and getting on the board of the companies... This sounds great for share holders but isnt this a bit of a conflict of interest ???


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## Miner (10 January 2010)

*Re: LRF - Linq Resourses*



adobee said:


> LRF has announced they plan to get more actively involved in their investments both trading and getting on the board of the companies... This sounds great for share holders but isnt this a bit of a conflict of interest ???




Hi Adobee

Are you still following LRF ?
I have been getting newsletters from LRF for long time.
I got interested to see it and did not find any posting for six month and the last one was from you in July and the previous one one year before that - same author.

So I am assuming you are a follower and believer of LRF.

What is the lastest update on this if you could share ?

Regards


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## adobee (17 February 2011)

By chance.. i bought some shares in LRF today.. 
I havent really been following LRF for the past 12 months as they did get hit hard at one stage but with a *substanial amount of holdings in AGO, CCC, JML, RIV, SDL, GBG,** OEX, ZRL,* I think they are probably a bit under valued as AGO , JML & ZRL have had substanial gains recently. ..  LRF has been doing a buy back of there stock as well I am not sure how this will pan out ..  Seems to be a bit of negativity around them at the moment but the same people were pretty happy when they were paying out BIG dividends..   With substanial holdings and also mezzanine financing to many of these companies you would expect they would have a pretty good handle on which ones are the best to be in and which arent ..


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