Dundee Corporation Demonstrates Progress on Advancing Core Mining Strategy and Announces Q2 2021 Financial Results

TORONTO, Aug. 11, 2021 (GLOBE NEWSWIRE) -- Dundee Corporation (TSX: DC.A) (the “Corporation” or “Dundee”) today announced its financial results for the three and six months ended June 30, 2021. All currency amounts in this press release are in Canadian dollars except as otherwise indicated.

SECOND QUARTER 2021 RESULTS

• Advanced core mining-focused investment strategy, growing the Corporation’s portfolio by making significant investments in mining companies.
  
  
• On a consolidated basis, the Corporation reported cash of $90.9 million as at June 30, 2021 (March 31, 2021 – $72.5 million).
  
  
• Reduced total corporate G&A costs by 72% compared to the second quarter of 2020 (79% excluding stock-based compensation).
  
  
• Successfully completed warrant exercise program for shares of Dundee Precious Metals Inc., providing aggregate proceeds of $32.9 million to the Corporation.
  
  
• Continued progress in rationalizing non-core legacy portfolio, multiple discussions for the sale of the beef division of Blue Goose Capital Corp. (“Blue Goose”) are ongoing.
  
  
• Generated consolidated revenues of $4.9 million (2020 – $3.9 million).
  
  
• Incurred a net loss attributable to owners of the Corporation of $11.5 million (2020 – earnings of $52.2 million), or a loss of $0.14 per share (2020 – earnings of $0.49 per share).
  
  
• Appointed Lila Manassa Murphy as Executive Vice President and Chief Financial Officer, and Steven Sharpe as Executive Vice Chair of the Corporation. Both senior executives have the mandate to facilitate and accelerate Dundee’s strategic transformation to Dundee 2.0.
  

Jonathan Goodman, President and Chief Executive Officer of Dundee Corporation, commented:

“We continue to advance our strategy of transforming Dundee Corporation into Dundee 2.0, which is a return to our roots as an active, mining-focused investor. The second quarter of 2021 was characterized by continued progress and momentum across all three of our strategic pillars: doing more mining deals, streamlining our cost structure, and rationalizing our legacy portfolio of non-core assets.”

“Our mining team was active in identifying, de-risking and investing in mining companies with significant value propositions. We grew our positions in Reunion Gold, Maritime Resources, and Ausgold to name a few. Subsequent to quarter-end, we acquired a 6% stake in Mako Gold. As our portfolio of high-quality, well-run mining investments continues to grow, we remain committed to working with our investee companies as trusted long-term advisors and partners focused on maximizing the value of their assets.”

Mr. Goodman noted, “We continued to rationalize our legacy portfolio of operating companies to engineer orderly, professional exits from business lines that are no longer aligned with our longer-term strategy. We have made further progress in advancing the divestitures of several non-core assets, including Blue Goose’s beef division. In the second quarter we completed our program to exercise our Dundee Precious Metals common share purchase warrants which brought in approximately $32.9 million in cash to the Corporation.”

“Accelerating this objective is a major priority for Dundee in 2021, and in late June we appointed Steven Sharpe as Executive Vice Chair of the Corporation with a mandate to lead the rationalization of our legacy portfolio. Mr. Sharpe is a seasoned executive with a breadth of public company experience. His skillset fits extremely well with this mandate. We look forward to updating the market with more details as these deals materialize.”

“We continue to work towards driving down our Corporate G&A run rate in the second quarter of 2021. We conducted significant cost reduction planning and evaluation of ways to reduce expenses in a number of cost centres including real estate, insurance, and IT, and will be more aggressive through the remainder of the year. During the second quarter of 2021, Lila Manassa Murphy was appointed as Executive Vice President and Chief Financial Officer and we believe that Ms. Manassa Murphy’s skillset and experience will be invaluable in optimizing our cost structure.”

Mr. Goodman concluded, “I am pleased with how our team executed on our transformation strategy in the second quarter of 2021. We continue to strengthen Dundee Corporation, and as our shift to Dundee 2.0 gathers further momentum, I am confident our hard work will manifest itself in setting us up to deliver sustainable value for our stakeholders and partners.”

FINANCIAL RESULTS

Operating results during the second quarter of 2021 reflect a $0.8 million market appreciation (2020 – $92.1 million, net of a $5.3 million transaction cost for disposition of DPM’s units) in certain of the Corporation’s investments that are carried in the consolidated financial statements at fair value through profit or loss. In addition, net income from investments during the second quarter of 2021 also includes $0.5 million (2020 – $0.7 million) dividend and interest income distributed from its portfolio investments.

A number of the Corporation’s investments are accounted for using the equity method of accounting, which requires that the Corporation increase or decrease the carrying value of its investment by its proportionate share of the net earnings or loss of the underlying investee. This method of accounting further subjects the Corporation to significant volatility in its operating performance as the underlying net earnings or loss of the equity accounted investee may be subject to market forces or other events over which the Corporation does not exert control. During the second quarter of 2021, the Corporation recognized a loss from its equity accounted investments, excluding real estate joint ventures, of $0.2 million (2020 – $4.7 million).

In May 2021, a total of 4,110,100 unlisted warrants to acquire shares of Dundee Precious Metals Inc. were exercised at a price of $8.00, providing aggregate proceeds of $32.9 million to the Corporation.

Subsequent to quarter end, on August 9, 2021, the Corporation entered into an amending agreement with Eight Capital whereby a $15.0 million payoff was agreed upon in three installments of $5.0 million. The total loan payoff amount will be $13,860,000. Additionally, a royalty payoff of $1,140,000 will be paid on the first installment date and will retire the royalty obligation. Interest on all unpaid balances after the first installment will accrue at 10% per annum. In the event of default under the amending agreement, Eight Capital is required to revert to the terms of the original subordinated loan agreement. The amending agreement is subject to IIROC approval.

OPERATING SUBSIDIARIES’ PERFORMANCE

Goodman & Company, Investment Counsel Inc. (“GCIC”)

GCIC’s AUM decreased from $80.6 million at the end of March 2021 to $73.0 million at the end of June 2021. The decrease in AUM is mainly due to market depreciation of $4.8 million. During the second quarter of 2021, redemptions of AUM were $2.0 million. During the second quarter of 2021, this segment recognized a net loss before taxes of $0.2 million (2020 – $0.7 million).

United Hydrocarbon International Corp. (“UHIC”)

As a result of the fair value change of the royalty interest and its associated contingent bonus payments, UHIC reported a pre-tax loss of $12.4 million (2020 – $17.0 million) during the second quarter of 2021. Due to the COVID-19 pandemic, the political conditions in Africa, and the material operational and financial developments at Delonex Energy Limited, UHIC delayed the estimated first oil production by two years to 2025 in determining the fair value of its royalty interest and associated contingent consideration. As a result, UHIC recorded a $12.1 million fair value loss (2020 – $16.8 million) during the second quarter of 2021, which is included in the June 2021 Interim Consolidated Financial Statements as “Remeasurement of financial instruments”.

Blue Goose

Blue Goose is currently in discussion with potential buyers for the sale of its beef division. As a result, the associated assets and liabilities of the beef division were reclassified as “Assets and liabilities held for sale” in the consolidated statements of financial position and the operating results of the beef division are classified as “Discontinued operations” in the consolidated statements of operations.

Blue Goose generated pre-tax earnings in the second quarter of 2021 of $0.6 million, of which $1.3 million was generated by discontinued operations, offset by a pre-tax loss of $0.7 million incurred by the continuing operations. This compares with a $3.3 million pre-tax loss incurred in the year ago period, of which $1.7 million and $1.6 million were incurred by discontinued and continuing operations, respectively.

Dundee Sustainable Technologies Inc. (“Dundee Technologies”)

Dundee Technologies incurred a pre-tax loss of $0.8 million (2020 – $0.1 million) during the second quarter of 2021. Dundee Technologies expects the primary driver in the coming years will be from its GlassLock ProcessTM, followed by long-term upside from its CLEVR ProcessTM. Second quarter 2021 revenue was $1.4 million (2020 – $1.0 million).

AgriMarine Holdings Inc. (“AgriMarine”)

As market conditions associated with COVID-19 persist, AgriMarine continued sales to alternative markets at slightly lower prices in an attempt to maintain sales volume. During the second quarter of 2021, AgriMarine reported a pre-tax net loss of $0.9 million (2020 – $0.8 million) with sales revenues of $1.7 million (2020 – $1.9 million).

SHAREHOLDERS’ EQUITY ON A PER SHARE BASIS

BOARD AND MANAGEMENT CHANGES

On May 14, 2021, Lila Manassa Murphy was appointed Executive Vice President and Chief Financial Officer of the Corporation. On June 25, 2021, Steven Sharpe was appointed Executive Vice Chair of the Corporation. Mr. Sharpe’s mandate is to facilitate the rationalization of Dundee’s portfolio of legacy investments and operating subsidiary companies. With their appointments both Ms. Murphy and Mr. Sharpe resigned as directors of the Corporation.

SECOND QUARTER 2021 CONFERENCE CALL AND WEBCAST DETAILS

Dundee’s management will be hosting a conference call for interested investors on August 12, 2021 at 10:00 am ET. Analysts and investors are invited to participate using the following dial-in numbers or webcast link:

Participant Number (Local): 416-764-8659
Participant number (Toll-free): 1-888-664-6392
Conference ID: 11365316
Audience URL:https://produceredition.webcasts.com/starthere.jsp?ei=1483003&tp_key=4debec3a4d

A replay of the conference call will be available until 11:59 pm (ET) August 26, 2021, and can be accessed using the following dial-in numbers:

Encore (Local): 416-764-8677
Encore (Toll-free): 1-888-390-0541
Encore ID: 365316#

The Corporation’s unaudited interim consolidated financial statements as at and for the three and six months ended June 30, 2021, along with the accompanying management’s discussion and analysis have been filed on the System for Electronic Document Analysis and Retrieval (“SEDAR”) and may be viewed by interested parties under the Corporation’s profile at www.sedar.com or the Corporation’s website at www.dundeecorporation.com

ABOUT DUNDEE CORPORATION:

Dundee Corporation is a public Canadian independent holding company, listed on the Toronto Stock Exchange under the symbol “DC.A”. Through its operating subsidiaries, Dundee Corporation is an active investor focused on delivering long-term, sustainable value as a trusted partner in the mining sector with more than 30 years of experience making accretive mining investments.

FORWARD-LOOKING STATEMENTS:

This press release may contain forward-looking information within the meaning of applicable securities legislation, which reflects Dundee Corporation’s current expectations regarding future events. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond Dundee Corporation’s control, which could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to, the factors discussed under “Risk Factors” in the Annual Information Form of Dundee Corporation and subsequent filings made with securities commissions in Canada. Dundee Corporation does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.

FOR FURTHER INFORMATION PLEASE CONTACT:

Greg DiTomaso
NATIONAL Public Relations
T: (416) 433-2801
E: gditomaso@dundeecorporation.com