Dundee Corporation (TSX: DC.A) (the “Corporation”
or “Dundee”) today announced its financial results for the three
and nine months ended September 30, 2023. All currency amounts in
this press release are in Canadian dollars, except as otherwise
indicated.
THIRD QUARTER 2023 RESULTS
- Reported a net loss from portfolio
investments for the third quarter of 2023 of $24.7 million (2022 –
income of $20.0 million). The key driver of performance during the
quarter was the market depreciation in Reunion Gold Corporation and
Centaurus Metals Limited by $12.8 million and $4.6 million,
respectively. Broad-based market weakness for mining stocks
accounted for the remaining decrease. For the nine months ended
September 30, 2023, the Corporation reported a net loss from
portfolio investments of $22.2 million (2022 – income of $13.7
million).
- Reported consolidated general and
administrative expenses for the current quarter of $4.6 million
(2022 – $6.5 million), representing a 29% year-over-year decline as
Dundee sustains momentum with cost-cutting initiatives. Corporate
head office general and administrative expenses fell to $3.1
million in the third quarter of 2023, declining 28% from $4.3
million incurred from the same period of the prior year.
- Reported share of loss from equity
accounted investments for the third quarter of 2023 of $0.6 million
(2022 – income of $1.0 million). For the nine months ended
September 30, 2023, Dundee reported a share of loss from equity
accounted investments of $4.1 million (2022 – income of $3.3
million).
- Reported a net loss attributable to
owners of the Corporation for the third quarter of 2023 of $26.5
million (2022 – earnings of $4.6 million), or a loss of $0.31 per
share (2022 – earnings of $0.04 per share, before the effect of any
dilutive securities).
- For the nine months ended September
30, 2023, the Corporation reported a net loss attributable to
owners of the Corporation of $36.0 million (2022 – $8.9 million),
or a loss of $0.43 per share (2022 – $0.13 per share).
Jonathan Goodman, President and Chief Executive
Officer of Dundee Corporation, commented:
“Dundee navigated a turbulent market environment
for junior mining in the third quarter. The reacceleration of
inflation, the specter of global growth cooling because of
tightening monetary measures, growing concerns over unmanageable
global fiscal deficits as well, as spiraling geopolitical
conflicts, all contributed to a material decline in the appetite
for risk, posing a significant headwind for our investment
portfolio in the third quarter. In the latest flight to safety, the
price of gold has reached over $2,000 per ounce, which strengthens
our conviction that the market is underestimating the value of
companies engaged in the discovery and development of high-quality
precious metals resources. We remain focused on investing in the
long-term and working with our investee companies as advisors and
partners to maximize asset value and realize their full
potential.”
“Meanwhile, Dundee continued to make progress on
the factors within its control, namely around cost reduction. In
addition to enabling our existing portfolio companies to move
forward with their strategic plans, during the quarter, Dundee took
steps to further de-risk the company by terminating its joint
venture arrangement in Borborema, Inc. in exchange for a net
smelter royalty on the sale of any product from Borborema, up to
2,000,000 ounces of gold. The royalty gives Dundee a direct line of
sight on anticipated future cash flows.”
Mr. Goodman concluded: “The entire team at
Dundee continues to work diligently to implement and execute on our
strategy across all fronts. I am encouraged by our ability to
sustain and grow our momentum in the second half of 2023, and we
are excited by the opportunity set ahead of us. Our team remains
committed to growing the core business, streamlining operations,
divesting our remaining non-core businesses and investments, and
positioning Dundee to deliver long-term, sustainable value for our
stakeholders, shareholders and partners. I would like to thank the
entire team for their hard work in navigating a time of continued
evolution.”
SEGMENTED FINANCIAL RESULTS
Mining Investments
In the third quarter of 2023, the Corporation
reported a net loss from the mining investments segment of $23.3
million (2022 – earnings of $17.5 million). Performance from the
mining investments portfolio contributed $25.6 million (2022 –
income of $17.7 million) to the net loss in this segment. The share
of income from equity accounted mining investments during the
current quarter of 2023 was $3,000 (2022 – loss of $0.2 million).
In addition, the Corporation recognized a $2.3 million gain in the
third quarter of 2023 related to the termination of the
Corporation’s 20% equity interest in the Borborema gold project
joint venture in exchange for a net smelter royalty as non-monetary
consideration.
During the first nine months of 2023, the
Corporation reported a net loss from the mining investments segment
of $22.4 million (2022 – earnings of $11.0 million). Performance
from the mining investment portfolio attributable a $22.7 million
loss (2022 – income of $11.3 million) to the net loss in this
segment. The share of loss from equity accounted mining investments
during the first nine months of 2023 was $1.9 million (2022 – loss
of $0.2 million).
Mining Services
During the three months ended September 30,
2023, the mining services segment, comprised of the Corporation’s
78% owned subsidiary, Dundee Sustainable Technologies (“DST”),
reported a pre-tax loss of $0.6 million (2022 – $0.9 million). The
current quarter included a $0.9 million gain on the sale of a
non-strategic operation and assets located at its Thetford Mines
technical facilities, and a $0.4 million gain on debt valuation
related to its convertible debenture. Also, DST invested $75,000
into Enim Technologies Inc., a Québec-based company focused on the
treatment of electronic waste material, in return for a 25% equity
interest.
During the first nine months of 2023, DST
incurred a pre-tax loss of $3.1 million (2022 – $2.5 million).
Corporate and others
The Corporation reported a pre-tax loss from the
corporate and others segment, including non-core subsidiaries, of
$3.5 million (2022 – $0.7 million) during the three months ended
September 30, 2023. During this period, the Corporation reported
head office general and administrative expenses of $3.1 million,
which decreased by 28% from the $4.3 million expense incurred from
the same period of the prior year. During the first nine months of
2023, the corporate and others segment reported a pre-tax loss of
$11.7 million (2022 – $7.7 million).
The fair value of portfolio investments in the
corporate and others segment increased by $0.9 million during the
three months ended September 30, 2023 (2022 – $2.3 million). The
increase was mainly attributable to the investment in TauRx
Pharmaceuticals Ltd., primarily on account of period-over-period
fluctuations in foreign exchange. The fair value of portfolio
investments in the corporate and others segment increased by $0.5
million during the first nine months of 2023 (2022 – $2.4
million).
Other subsidiaries and equity accounted
investments contributed $1.1 million and $0.6 million,
respectively, to this segment’s total pre-tax loss during the third
quarter of 2023 (2022 – loss of $1.1 million and income of $1.3
million, respectively). During the first nine months of 2023, other
subsidiaries and equity accounted investments contributed $3.1
million and $2.1 million, respectively, to this segment’s total
pre-tax loss (2022 – loss of $4.5 million and income of $3.5
million, respectively).
SHAREHOLDERS’ EQUITY ON A PER SHARE BASIS
|
|
Carrying Value |
|
|
|
Carrying Value |
|
|
|
September 30, 2023 |
|
|
|
December 31, 2022 |
|
Mining Investments |
|
|
|
|
|
|
|
Portfolio investments |
$ |
146,826 |
|
|
$ |
168,598 |
|
Equity accounted investments |
|
8,378 |
|
|
|
26,506 |
|
Royalty |
|
18,921 |
|
|
|
- |
|
|
|
174,125 |
|
|
|
195,104 |
|
Mining Services |
|
|
|
|
|
|
|
Subsidiaries |
|
3,051 |
|
|
|
3,081 |
|
Equity accounted investment |
|
75 |
|
|
|
- |
|
|
|
3,126 |
|
|
|
3,081 |
|
Corporate and Others |
|
|
|
|
|
|
|
Corporate |
|
28,732 |
|
|
|
36,333 |
|
Portfolio investments ‒ other |
|
67,956 |
|
|
|
67,455 |
|
Equity accounted investments ‒ other |
|
27,899 |
|
|
|
28,557 |
|
Real estate joint ventures |
|
3,354 |
|
|
|
6,796 |
|
Subsidiaries |
|
7,410 |
|
|
|
16,814 |
|
|
|
135,351 |
|
|
|
155,955 |
|
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY |
$ |
312,602 |
|
|
$ |
354,140 |
|
Less: Shareholders' equity attributable to holders of: |
|
|
|
|
|
|
|
Preference Shares, series 2 |
|
(27,667 |
) |
|
|
(27,667 |
) |
Preference Shares, series 3 |
|
(40,976 |
) |
|
|
(50,423 |
) |
SHAREHOLDERS' EQUITY ATTRIBUTABLE TO CLASS A SUBORDINATE
SHARES |
|
|
|
|
|
|
|
AND CLASS B SHARES OF THE CORPORATION |
$ |
243,959 |
|
|
$ |
276,050 |
|
|
|
|
|
|
|
|
|
Number of shares of the Corporation issued and outstanding: |
|
|
|
|
|
|
|
Class A Subordinate Shares |
|
85,474,363 |
|
|
|
84,968,090 |
|
Class B Shares |
|
3,114,491 |
|
|
|
3,114,491 |
|
Total number of shares issued and outstanding |
|
88,588,854 |
|
|
|
88,082,581 |
|
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY ON A PER SHARE BASIS |
$ |
2.75 |
|
|
$ |
3.13 |
|
* Shareholders' Equity on a per share basis is
calculated as total shareholders' equity per the financial
statements, less the carrying amount of preference shares series 2
and series 3, and divided by the total number of Class A and Class
B shares issued and outstanding
The Corporation’s unaudited interim consolidated
financial statements as at and for the three and nine months ended
September 30, 2023 and 2022, 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.sedarplus.ca or the Corporation’s website at
www.dundeecorporation.com.
BOARD OF DIRECTORS CHANGES
Dundee is also announcing today the retirement
of Murray Sinclair as a member of the board of directors and the
appointment of Bruce McLeod as a new independent member of the
board of directors of the Corporation.
Mr. McLeod is a Mining Engineer with over 30
years of experience in all areas of the mining industry. Most
recently, he was the President and CEO of Sabina Gold & Silver
Corp. until Sabina was acquired by B2Gold Corp. in April 2023 for
C$1.2B. Mr. McLeod also served as a director of Kaminak Gold Corp.,
which was acquired by Goldcorp Inc. for $520 million in 2016. Prior
to that, he served in a senior capacity with a number of operating
and development mining ventures, including, President and CEO of
Mercator Minerals Ltd.; President, CEO and director of Creston Moly
Corp.; and founder of both Sherwood Copper Corp. and Stornoway
Diamond Corp. He also served on the board of directors of Palmarejo
Silver and Gold Corp. (acquired by Coeur D'Alene Mines for $1.2
billion) and Ariane Gold (acquired by Cambior Inc.) and has been
involved in numerous projects at various stages of development
while with the Northair Group. Mr. McLeod was the co‐recipient of
AME BC's E.A. Scholz award for excellence in mine development in
2009 and primarily focuses on project development, strategic
planning, and financing activities. Jonathan Goodman,
President and Chief Executive Officer of Dundee Corporation,
commented:
“On behalf of myself and the entire board we
would like to sincerely thank Murray for his invaluable
contributions as a member of the board of directors for the last 11
years. We are also very excited to welcome Bruce to our board.
Bruce is an experienced mining engineer and executive with a deep
knowledge of capital markets.”
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:
Investor and Media RelationsT: (416) 864-3584E:
ir@dundeecorporation.com
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