Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?

[petec]

Straw poll, where does the common bottom as convert holders panic sell? At 84 today I am tempted to think that process has started, but not ended.

[sculpin]

Straw poll, where does the common bottom as convert holders panic sell? At 84 today I am tempted to think that process has started, but not ended.

 

No idea but if Goodman would actually get rid of Blue Goose and a few other non cores and stop throwing money down the spec junior mining hole, Dumbdee could likely buy back the 40 million shares they issued to redeem the prefs below a $1. If nano cap dogs Reitman's & Input can make it happen, why not DC?

Reitmans (Canada) Ltd. intends to make a substantial issuer bid pursuant to which the company will offer to repurchase for cancellation up to 15 million of its outstanding Class A non-voting shares at a purchase price of $3 per share from holders of such shares in Canada. If the offer is fully subscribed, the shares purchased would represent approximately 30.1 per cent of the total shares issued and outstanding at June 17, 2019, with 49,890,266 shares currently issued and outstanding.

 

 

 

Input Capital Corp. has released the final results of its modified Dutch auction substantial issuer bid to purchase for cancellation up to $15-million of its outstanding common shares from shareholders for cash. Based on the final count by TSX Trust Company, as depositary for the offer, the company has taken up and paid for 16,088,083 shares at a price of 82 cents per share, for an aggregate purchase price of approximately $13,192,228 excluding fees and expenses relating to the offer. The shares purchased for cancellation under the offer represent approximately 20 per cent of the shares issued and outstanding before giving effect to the offer. After giving effect to the offer, approximately 65,933,877 shares are issued and outstanding.

[Edward]

A bit late to this party (maybe a good thing?)

 

After digging in a little bit I believe the only "real" assets this company has is 40M in cash and 160M in Dundee Precious Metals stock. This 200M minus 120M in remaining preferreds is 80M, about the same as the current Market Cap. How is this undervalued?

 

Yes, I know there is some royalty from some oil in Chad and a pile of money losing subsidiaries. To me, all of this is Zero.

 

Prove me wrong, please.

[sculpin]

A bit late to this party (maybe a good thing?)

 

After digging in a little bit I believe the only "real" assets this company has is 40M in cash and 160M in Dundee Precious Metals stock. This 200M minus 120M in remaining preferreds is 80M, about the same as the current Market Cap. How is this undervalued?

 

Yes, I know there is some royalty from some oil in Chad and a pile of money losing subsidiaries. To me, all of this is Zero.

 

Prove me wrong, please.

 

Great to be late! Buy at $0.80 and get all the worthless stuff for free. And maybe they will buy back the preferred at a big discount to the $120mm some day. Optionality...

 

Couple of decent value investors...

 

Roumell....

 

Factoring in the additional common shares and the elimination of the preferred stock

liability, we estimate that the reported NAV will approximate $4.58. The shares currently

trade at only $1.15 giving us an attractive 75% discount to reported NAV. Even under

our most conservative scenario assumption, where we take certain significant haircuts

to Management’s valuations and factor in future cash expenses, we believe the shares

trade at about a 50% discount to NAV.

 

Ravensource....

 

Free of emotional baggage carried by existing investors, we worked to determine whether there

was opportunity within the chaos. With Dundee’s portfolio of ~100 names, we first performed

triage to cull the smaller and speculative investments and focused our analytical rigour on the

remaining few with tangible and obvious value. Our analysis concluded Dundee’s assets were

worth in excess of the face value and 3x the market value of its preferred shares. We were also

attracted to the preferred shares’ 12% dividend yield, equivalent to 15.7% interest on a bond

factoring in the tax advantages of dividends. In the third quarter of 2018 we began buying the Series

2 & 3 preferred shares, based on a large margin of safety, healthy yield and potential catalysts for

meaningful capital appreciation.

[Edward]

I would think more than 12% dividend on the preferred would be required fr this kind of mess. 15-20% perhaps, just to get me off my chair.

[bizaro86]

A bit late to this party (maybe a good thing?)

 

After digging in a little bit I believe the only "real" assets this company has is 40M in cash and 160M in Dundee Precious Metals stock. This 200M minus 120M in remaining preferreds is 80M, about the same as the current Market Cap. How is this undervalued?

 

Yes, I know there is some royalty from some oil in Chad and a pile of money losing subsidiaries. To me, all of this is Zero.

 

Prove me wrong, please.

 

Great to be late! Buy at $0.80 and get all the worthless stuff for free. And maybe they will buy back the preferred at a big discount to the $120mm some day. Optionality...

 

Couple of decent value investors...

 

Roumell....

 

Factoring in the additional common shares and the elimination of the preferred stock

liability, we estimate that the reported NAV will approximate $4.58. The shares currently

trade at only $1.15 giving us an attractive 75% discount to reported NAV. Even under

our most conservative scenario assumption, where we take certain significant haircuts

to Management’s valuations and factor in future cash expenses, we believe the shares

trade at about a 50% discount to NAV.

 

Ravensource....

 

Free of emotional baggage carried by existing investors, we worked to determine whether there

was opportunity within the chaos. With Dundee’s portfolio of ~100 names, we first performed

triage to cull the smaller and speculative investments and focused our analytical rigour on the

remaining few with tangible and obvious value. Our analysis concluded Dundee’s assets were

worth in excess of the face value and 3x the market value of its preferred shares. We were also

attracted to the preferred shares’ 12% dividend yield, equivalent to 15.7% interest on a bond

factoring in the tax advantages of dividends. In the third quarter of 2018 we began buying the Series

2 & 3 preferred shares, based on a large margin of safety, healthy yield and potential catalysts for

meaningful capital appreciation.

 

Regarding optionality - there is certainly optionality here, and I agree that cash + DPM - liabilities/prefs is a pretty hard value.

 

However, that optionality is absolutely not free, even if it has no upfront cost. Dundee is burning cash pretty quickly with spending on G&A, prefs, and making new goofy investments. So there is a true "option premium" being paid for the potential that Chad or something else comes in, in the form of cash burn until that happens.

 

Realistically, I can't imagine anyone thinks this is a quality business/compounder, and I think most would agree that absent a big hit (Chad is a go!) that whatever your number for NAV is it will probably be lower in a year from now. Definite melting ice cube.

 

I'm not saying it can't go up, and I chickened out and closed my short to take a very nice short term profit, so I have no position here.

[sculpin]

Dundee holding in Dundee Precious Metals now worth $191 million or $1.91 per share with DPM at $5.25 today. As well they have reported this position in Cantex back in March...

 

Mr. John Vincic of Dundee reports

 

ACQUISITION OF SHARES OF CANTEX MINE DEVELOPMENT CORP.

 

 

Immediately following the acquisition of securities described in this report, Dundee owned or controlled 4,214,545 common shares and two million warrants of the company, representing an approximate 10-per-cent interest on an undiluted basis and a 14.1-per-cent interest on a partially diluted basis.

 

If they still own this & own it wholly then....DC owns 4.2 million shares of Cantex (CD - TSXV) trading at $6.49 up from $0.80 in March. This is worth $27 million. They also own 2 million warrants - could be worth another $10mm.

 

 

They have other spec gold mining positions as well but only know the ones that are above 10% reporting levels...

 

 

[sculpin]

Polar Capital continues to buy DC.A

 

As at July 31, 2019, Polar, on behalf of client accounts over which it has discretionary trading authority, exercised control or direction over 12,623,208 Shares of the Issuer, representing approximately 12.63% of the issued and outstanding Shares.

 

The requirement to file this report was triggered on July 22, 2019, when Polar, on behalf of client accounts over which it has discretionary trading authority, acquired 777,778 Shares of the Issuer.

[Rod]

Looks like a buyback of B and D preferred shares is coming:

 

(from news release)

 

“During the second quarter, we improved our capital structure and lowered our future interest expenses with the successful conversion of our Preference Shares, series 5 to Class A subordinate voting shares of the Corporation” said Mr. Goodman. “Going forward, we will continue to look at ways to optimize our capital structure, lower interest payment obligations and reduce our overall expenses.”

 

“As part of this, we are taking steps to consider the implementation of a normal course issuer bid and possibly a substantial issuer bid for our Preference Shares, series 2 and series 3. After careful consideration, we believe this provides the Corporation and its stakeholders with more benefits than taking similar action for the Class A subordinate voting shares, which was previously considered by our board of directors,” added Mr. Goodman.

[doc75]

Looks like a buyback of B and D preferred shares is coming:

 

(from news release)

 

“During the second quarter, we improved our capital structure and lowered our future interest expenses with the successful conversion of our Preference Shares, series 5 to Class A subordinate voting shares of the Corporation” said Mr. Goodman. “Going forward, we will continue to look at ways to optimize our capital structure, lower interest payment obligations and reduce our overall expenses.”

 

“As part of this, we are taking steps to consider the implementation of a normal course issuer bid and possibly a substantial issuer bid for our Preference Shares, series 2 and series 3. After careful consideration, we believe this provides the Corporation and its stakeholders with more benefits than taking similar action for the Class A subordinate voting shares, which was previously considered by our board of directors,” added Mr. Goodman.

 

I'm contemplating taking some steps toward considering the option of potentially purchasing some more shares based on this news.

 

What's with the over-hedged language?  It's seriously taken them an entire quarter to get  to this point?

 

[Rod]

Looks like a buyback of B and D preferred shares is coming:

 

(from news release)

 

“During the second quarter, we improved our capital structure and lowered our future interest expenses with the successful conversion of our Preference Shares, series 5 to Class A subordinate voting shares of the Corporation” said Mr. Goodman. “Going forward, we will continue to look at ways to optimize our capital structure, lower interest payment obligations and reduce our overall expenses.”

 

“As part of this, we are taking steps to consider the implementation of a normal course issuer bid and possibly a substantial issuer bid for our Preference Shares, series 2 and series 3. After careful consideration, we believe this provides the Corporation and its stakeholders with more benefits than taking similar action for the Class A subordinate voting shares, which was previously considered by our board of directors,” added Mr. Goodman.

 

I'm contemplating taking some steps toward considering the option of potentially purchasing some more shares based on this news.

 

What's with the over-hedged language?  It's seriously taken them an entire quarter to get to progress to this point?

 

The language on the conference call was much clearer. They are going ahead with a NCIB of the B and D prefs. They see it as a way to retire debt with a par value of $25 at a very large discount. They acknowledge that volumes are low in the prefs so it will be hard to buy in bulk, but they think more volume will appear if they bid up for them. So, I would say that is all very bullish for the prefs. A SIB is something they are considering for the future if and when more cash becomes available.

[petec]

The call is also very bullish for the common. Delonex is going the right way, Parq is improving, buying the prefs is super accretive for BV, Android is growing and likely carried below BV, they have a shot at selling TauRx (which I’d assumed was a zero). I think the risk/reward is swinging in favour of the common.

[sculpin]

DUNDEE CORPORATION (DC.A – TSX, $0.99) Rating: BUY

 

Old Target Price: $2.10

New Target Price: $2.60

 

Q2 FINANCIAL RESULTS – LEANER AND POISED TO MINE PROFITS

 

Dundee Corporation released Q2/19 financial results after market close yesterday.

 

Net loss attributable to owners was $7.9M ($0.12/share) vs. a loss of $76.9M ($1.34/share) in Q2/18 and loss of $202.4M ($3.49/share) in full-year 2018. Consolidated revenues were $7.3M in the quarter vs. $13.3M in Q2/18, after the exit of non-core businesses and a focus on the investment portfolio.

 

In the quarter, the value of the investment portfolio appreciated $11.3M to a total of $310.4M, largely driven by a $16.1M appreciation in the 20% position (36.4M shares) in Dundee Precious Metals. Since quarter-end, the value of this position has increased another $4.7M, while also having the high growth opportunities of its new mine in Bulgaria.

 

The core of Dundee’s investments is Dundee Precious Metals, Parq Vancouver, Android Industries and United Hydrocarbon International Inc. Management continues to look at divesting non-core businesses in 2019. In Q2, Dundee generated $7.9M from the sale of non-core investments, including the Canadian franchise license for Sotheby’s for $5.0M. Since early 2018, the number of positions has been cut from 100+ to ~30 major investments. As part of the rationalization strategy, G&A expenses have decreased to $9.5M in Q2/19 vs. $18.5M in Q2/18. Management anticipates a $13-14M run rate on G&A by year-end.

On May 10, Dundee announced that Parq Holdings LP had secured a refinancing on its substantial debt load, at a lower fixed rate and less restrictive covenants. This will reduce the total interest expense burden by ~300 bps and is a crucial step for cash flow and operational feasibility at Parq Vancouver.

 

On May 15, $82.6M in Series 5 Preference Shares was converted into DC.A shares at a $2.00 floor price, requiring issuance of ~42M shares. Dundee paid $1.5M in dividends on these shares in Q1/19. We view the removal of these cash outflows and elimination of the uncertainty surrounding the original maturity date in June 2019 as a positive for Dundee. However, the resulting overhang has placed pressure on the share price.

 

Management continues to evaluate a NCIB or SIB following conversations with the CRA. The focus has shifted to buying back Series 2 or Series 3 Preference shares rather than Class A shares.

 

In conjunction with yesterday’s release, Dundee also announced the appointment of Steven Sharpe to its board of directors. Mr. Sharpe is Managing Director of EmBeSa Corporation.

 

Our current core book value analysis indicates an increased target price of $2.60/share (from $2.10) with potential for additional upside if investment performance continues to improve and binary events are realized.

 

VALUATION

 

Based on the current values of its known public investments and the carrying value of other core balance sheet items, we calculate a core book value of $2.60/share. Moving forward, the company is focusing on its core competencies (primarily in the resource sector). Thus, performance in commodity prices and idiosyncratic events at larger holdings such as Dundee Precious Metals will have an outsized effect on Dundee Corp.’s book value. As the gold price environment has dramatically improved, Dundee is becoming increasingly attractive for its mining portfolio and the deep discount of DC.A shares vs. the value of its position in DPM alone. We believe that now that Dundee has sold off a substantial portion of its underperforming investments, periods of substantial losses will be much less drastic and frequent. Thus, it is becoming increasingly convincing to see the share price discount to tangible book value (0.2x) now that book value appears to be stabilizing. We emphasize that our core book value analysis ignores a number of potential growth drivers. For example, the value of Parq Vancouver is zero on Dundee’s balance sheet. Now that a refinancing has been obtained, it is much more likely now that Dundee will recover some of its investment value vs. a few months ago. Another large balance sheet item is Resource Assets, which is dependent on payouts and royalties on Delonex achieving first oil at United Hydrocarbon Chad’s assets (sold by UHIC in 2017). Because this is inherently unpredictable and a binary event, we are not including it in our valuation. If first oil were to be achieved in the next couple years, the resulting cash flows would likely be multiples higher than the current book value of Resource Assets, as it is calculated with probabilistic models.

 

Dundee aims to continue exiting non-core positions, including Blue Goose, TauRx and its $13.7M subordinated loan to Eight Capital. After the sale of Blue Goose, almost all of Dundee’s debt balance would be eliminated (~$52M). Thus as a sale looks increasingly likely, we no longer consider that debt in our core book value analysis.

 

Analyst: Andrew Hood

416.603.7381 x230

ah@mpartners.c

[lessthaniv]

Making progress.

Thanks for the update sculpin

[zuokk]

New rates announced:

 

With respect to any Series 2 Shares that remain outstanding on September 30, 2019, holders

thereof will be entitled to receive fixed rate cumulative preferential cash dividends on a quarterly

basis, as and when declared by the Board of Directors of the Company and subject to the

provisions of the Business Corporations Act (Ontario). The dividend rate for the five-year period

commencing on September 30, 2019 to, but excluding September 30, 2024, will be 5.284%, being

equal to the sum of the five-year Government of Canada bond yield as at September 3, 2019, plus

4.10%, as determined in accordance with the terms of the Series 2 Shares.

 

With respect to any Series 3 Shares that remain outstanding on September 30, 2019, holders

thereof will be entitled to receive floating rate cumulative preferential cash dividends on a

quarterly basis, calculated on the basis of actual number of days elapsed in each quarterly floating

rate period divided by 365, as and when declared by the Board of Directors of the Company and

subject to the provisions of the Business Corporations Act (Ontario). The dividend rate for the

three-month period commencing on September 30, 2019 to, but excluding, December 31, 2019,

will be 5.74%, being equal to the sum of the three-month Government of Canada Treasury bills

yield preceding September 3, 2019, plus 4.10%, as determined in accordance with the terms of the

Series 3 Shares.

[ADcure]

I believe that sale of Taurx prior to IPO would be a monumental mistake.

[petec]

I believe that sale of Taurx prior to IPO would be a monumental mistake.

 

Would you mind explaining? A while back the view here seemed to be that TauRx was a dud, the drug didn't work, etc etc. Do you have a different view?

[ADcure]

2 things about Taurx's drug, #1 it was given "orphan drug status" by FDA for some dementia. #2 if one reads the complete results of last phase 3 trial it becomes apparent that the drug does have a lot of merit, even surprising the folks at Taurx, thus the new trial Lucidty.

[Rod]

2 things about Taurx's drug, #1 it was given "orphan drug status" by FDA for some dementia. #2 if one reads the complete results of last phase 3 trial it becomes apparent that the drug does have a lot of merit, even surprising the folks at Taurx, thus the new trial Lucidty.

 

I'd rather they sell it. The chance that TauRX has commercial value is very low, like all drug development. If it does have value it will be worth a lot. So, it's more of a lottery ticket. I don't think Dundee should be owning lottery ticket investments. They need to focus on more sure bets and rebuild their balance sheet.

[petec]

Does anyone known whether the tax reassessment announced last week closes the matter, or could there be further news?

[Cardboard]

"As part of this reassessment, the corporation intends to pay the full amount within the next two weeks in order to stop further interest from accruing. Additionally, the corporation intends to file an appeal of this reassessment within the required regulatory time frame."

 

 

 

 

 

[petec]

"As part of this reassessment, the corporation intends to pay the full amount within the next two weeks in order to stop further interest from accruing. Additionally, the corporation intends to file an appeal of this reassessment within the required regulatory time frame."

 

Yes - perhaps I phrased the question badly - what I meant was, are any further reassessments outstanding (e.g. for other tax years) or is it one-and-done?

[sculpin]

We have a Research Note on Dundee Precious Metals Inc. (DPM – TSX).

 

Yesterday Dundee Precious Metals Inc. announced strong Q3/19 production results. Ada Tepe had a strong quarter as a result of higher grade processed. In Q3 the mill processed higher grades that were stockpiled during commissioning. Chelopech is on track to achieve guidance, while as anticipated due to lower grades, gold production and recovery in Q3 was slightly lower. DPM is maintaining its production guidance of between 180 Koz Au and 221 Koz Au; and 32 Mlbs Cu and 37 Mlbs Cu.

 

Production however was higher than our expectation, coming in at 66 Koz gold and 10 Mlbs copper. Still as a result of concentrate shipment timing, payable metals in concentrate sold for both mines were lower: 38 Koz gold and 6.6 Mlbs copper. DPM notes it will increase Q4/19 shipments. We highlight Chelopech and Ada Tepe are in line to meet FY19 guidance. The Ada Tepe Mine has successfully completed ramp-up and has been operating at full design tonnage of 2,500 tpd and 85% gold recovery.

 

DPM highlighted that construction of the integrated mine waste facility cells were completed and the settlement time of tailings has improved, allowing the plant design capacity to be achieved. DPM is constructing additional cells that will allow further flexibility. The focus should now shift to production optimization.

 

INVESTMENT THESIS

 

DPM produces gold and copper from two mines in Bulgaria: the Chelopech Mine and Ada Tepe. It also operates Tsumeb, a concentrate smelter in Namibia. In Q2/19, DPM declared commercial production at Ada Tepe and has just completed ramping up. Additionally, DPM has a PEA stage pipeline gold project, Timok, in Serbia and a portfolio of investments, including 10% of Sabina Gold & Silver Corp. (SBB:TSX).

 

·        DPM is positioned to be a long-term, low-cost gold producer with a strong resource and reserve base, a solid management team, near term production growth, and free cash flow from mining friendly jurisdictions. The Company has strong institutional backing. 

 

·        The Chelopech Mine (NAV: $762M) is DPM’s lower cost flagship mine  with annual production of ~200 Koz Au at a low cash cost of ~$400/oz and AISC of ~$650/oz. For the foreseeable future, Chelopech will continue to produce the lion’s share of DPM’s gold production and underpin its attractive valuation.

 

·        The Ada Tepe Mine (NAV: $327M) marked the beginning of a new chapter. DPM declared commercial production in July 2019 and has just completed ramp-up to 2500 tpd. Construction was completed under budget. It is a high grade (4.04 g/t Au) open pit gold mine. It is a harbinger for higher production and free cash flow growth. It is expected to produce ~100 Koz Au/yr over the first 5 years and ~85 Koz/yr at a low cash cost per ounce of $404 over LOM.

 

·        Tsumeb smelted 232 Mt (up from 219 Mt in 2017), at an improved cash cost to US$445/t, down from US$458 in 2017.

 

·        The Timok Gold Project is a pipeline project. In July, DPM completed a PEA showing robust economics, having an after-tax NPV5% of $105M, an IRR of 18.6%, a low cash cost and AISC of $618/oz and $717/oz, with average production of 75 Koz Au per year over LOM of 9 years.

 

·        Improved Production: FY18 revenue was $377M from the sale of 163.6 Koz of Au and 33.7 Mlbs of Cu. YoY production results were driven by higher gold and copper output from Chelopech.

 

·        Improved AISC: FY18 AISC, net by product, was $659/oz Au sold, down from $729 in the previous year.

 

·        Guidance (July 30, 2019): We expect DPM to sell 199 Koz in 2019 and produce 262 Koz in 2020. Guidance is between 180 Koz and 221 Koz for 2019 and no guidance has been given for 2020. DPM is guiding for 2019 AISC of between US$675 and US$820, payable copper between 32 and 37 Mlbs, and to process 210 to 230 Kt at the Tsumeb smelter. DPM is on pace to meet guidance.

 

·        DPM has improved performance throughout all its units.

 

 

Valuation: We maintain our BUY rating and 12-month target price of C$7.50/share. Our valuation is based on a 1.0x NAV based on l a long term gold and copper price of $1,400/oz and $2.75/lbs. DPM is trading at 0.6x our NAV estimate. Its 2019E P/CFPS of 5.3x and 2020E P/CFPS of 3.0x reflect a discount to mean peers at 8.4x and 5.7x, respectively.

 

 

T. 416.603.4343

 

F. 416.603.8608

 

E: research@mpartners.ca

 

www.mpartners.ca

 

70 York Street Suite 1500

 

Toronto, ON Canada M5J 1S9

 

 

[sculpin]

Ravensource comment on DC & preferreds...

 

Dundee Corp. (“Dundee”)

 

Dundee (TSX: DC.A) is a publicly listed holding company headquartered in Toronto, with

investments in a number of sectors including mining, oil & gas, real estate, hotels / gaming and

agriculture. After a thorough due diligence process, Ravensource began investing in Dundee’s

Series 2 & 3 preferred shares – the most senior securities in its capital structure – in August 2018.

 

In March 2019, Dundee announced it would convert its $82 million of Series 5 preferred shares,

which had ranked equally with our preferreds, into equity which ranks behind us (the “Series 5

Equitization”). For us, this was a watershed event as it significantly expanded the intrinsic value of

our preferred shares while materially reducing their risk. In effect, we jumped the queue to

Dundee’s assets. To illustrate, Dundee’s most valuable asset is likely its $175 million stake in

publicly traded Dundee Precious Metals Inc (“DPM”). Prior to the Series 5 Equitization, there were

$212 million of Series 2, 3 and 5 preferred shares outstanding, meaning that the DPM stake covered

83% of the total preferred share face value. Post the Series 5 Equitization, only $130 million of

preferred shares remained outstanding. With first dibs on Dundee assets, the preferreds’ $25 face

value is now 135% covered by the DPM stake alone. Factoring in the other Dundee assets, we

conservatively believe that the face value of Dundee’s preferred shares is more than 230% covered.

 

As we only paid 48 cents on the dollar for our preferred shares, our purchase price is almost 5x

covered by Dundee’s assets. It is very rare to find an asset with as high a margin of safety as

Dundee’s preferred shares that also has a path to a very high potential return of 100%.

 

While the value of our investment increased substantially as a result of the Series 5 Equitization,

the market price of the preferreds did not. We capitalized on the disconnect by buying more. Our

objective is now to capture the difference between price and their value. To put a finer point on

this, the preferred shares ended the period trading at just under $13.00 per share. Contractually, we

are owed $25.00 per share and must receive this before any economic distribution flows to the common equity.

As we believe the $25.00 per share to be well covered by the assets, this $12.00

difference is our opportunity.

 

Capturing this gap is easier said than done, as unlike bonds, preferred shares have no maturity

date or mechanism to force repayment meaning that price and value can remain disconnected for

a long period of time. While this difference persists, we will earn an attractive 12.1% dividend yield

on our preferred shares, equivalent to 14.5% bond interest factoring in the tax advantage of

dividends.

 

Ultimately, the company / common shareholders will have to address the discount as

they cannot monetize their economic stake while it persists. As active investors, we are engaged

with various stakeholders to surface a solution that would both enhance Dundee’s shareholder

value and drive returns for Ravensource.

[petec]

Interesting comments on the call about their confidence in Android and "indicative bids" on Blue Goose. I feel like the NAV continues very slowly to harden up.

 

Edit: also positive commentary on Android (growth in 2020), Parq (doing better and plenty more to come in knowhow from new partner), Blue Goose ("starting to make money"), Dundee Merchant Partners (fund launch planned for 2020 and reiterated that with junior mining valuations at bottom there is opportunity if you have good due diligence), head office costs (heading to $12m including cost of prefs).

 

2q commentary was also positive on Aquamarine (approaching ebitda breakeven after investment), Taurx (decent chance of a sale), and Delonex (Phase 1 drilling successful, planning Phase 2, will spend far more than committed).

 

Slowly I feel this is coming together.