TORONTO, March 28, 2023 (GLOBE NEWSWIRE) — Dundee Corporation (TSX: DC.A) (the “Corporation” or “Dundee”) today announced its financial results for the three months and year ended December 31, 2022. All currency amounts in this press release are in Canadian dollars except as otherwise indicated.
FOURTH QUARTER AND YEAR-END 2022 RESULTS
- Reported net income from investments for the fourth quarter of 2022 of $39.9 million (2021 – $12.1 million). For the year ended December 31, 2022, the Corporation reported net income from investments of $53.6 million (2021 – loss of $38.5 million).
- Reported net earnings attributable to owners of the Corporation for the fourth quarter of 2022 of $26.0 million (2021 – loss of $13.6 million), or earnings of $0.28 per share, before the effect of any dilutive securities (2021 – loss of $0.17 per share). Correspondingly, Dundee reported total net earnings from continuing operations of $31.4 million (2021 – loss of $9.2 million), or earnings of $0.34 per share, before the effect of any dilutive securities (2021 – loss of $0.12 per share), and losses from discontinued operations of $5.4 million (2021 – $4.4 million), or a loss of $0.06 per share (2021 – $0.05 per share).
- For the year ended December 31, 2022, the Corporation reported total net earnings attributable to owners of the Corporation of $17.1 million (2021 – loss of $93.0 million), or earnings of $0.15 per share, before the effect of any dilutive securities (2021 – loss of $1.09 per share). Correspondingly, Dundee reported net earnings from continuing operations of $30.1 million (2021 – loss of $84.5 million), or earnings of $0.30 per share, before the effect of any dilutive securities (2021 – loss of $0.99 per share), and losses from discontinued operations of $13.0 million (2021 – $8.5 million), or a loss of $0.15 per share (2021 – $0.10 per share).
Jonathan Goodman, President and Chief Executive Officer of Dundee Corporation, commented:
“Dundee returned to profit in 2022, partly due to strong investment performance from one of its core portfolio holdings, Reunion Gold Corporation, who is advancing the Oko West gold project in Guyana. The Oko West project is one of the most exciting new gold discoveries of this cycle with the potential for strong economics. Additionally, during the fourth quarter, Dundee participated in Magna Mining Inc.’s $20.0 million private placement, advancing $5.0 million to facilitate a key synergistic acquisition of Lonmin Canada Inc., which will add tremendous value through exploration and development potential. Subsequent to year-end, Dundee participated in Magna’s $18.0 million private placement, advancing an additional $1.5 million.”
“Despite continued headwinds in 2022, Dundee closed the privatization transaction of Big River Gold in the third quarter, partnering with Aura, an ESG-minded operator, to advance the Borborema Gold Project, a development stage mining project in Brazil.”
“We believe depressed market valuations in the mining sector create an opportunity for Dundee, as we hold to our strong conviction that the need for high quality and sustainably sourced mining assets has never been greater. We remain focused on investing for the long-term and working with our investee companies to maximize asset value and realize their full potential. In addition, our share price trades at a considerable discount to corporate net asset value per share. Furthermore, we believe that our portfolio assets, whose share prices make up our underlying NAV, also trade at a significant discount to their underlying value. This presents a unique opportunity for our shareholders to acquire a high-quality portfolio of assets at a significant double discount to their underlying value with leverage to rising commodity prices.”
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 2023 and we are excited by the opportunity set ahead of us. Our team remains committed to growing the core business, streamlining operations, divesting non-core businesses, 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 significant transformation.”
FINANCIAL RESULTS
Operating results during 2022 reflect $51.2 million market appreciation (2021 – $41.6 million depreciation) 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 2022 includes $2.4 million (2021 – $3.2 million) of dividend and interest income distributed from its portfolio investments. Additionally, during 2022, the Corporation recognized earnings from its equity accounted investments, excluding real estate joint ventures, of $2.2 million (2021 – $3.0 million).
During 2022, Dundee’s mining portfolio benefited from strong performance from one of its core holdings, Reunion Gold Corporation (“Reunion Gold”), which contributed $40.7 million to net income from investments in 2022. In our non-core portfolio, a revaluation of a pharmaceutical holding, TauRx Pharmaceuticals Ltd. (“TauRx”), contributed an additional $29.6 million to net income from investments in 2022. TauRx is currently valued at an approximate 5% premium to the price of a recent financing that raised approximately US$119.0 million for the pharmaceutical company. Additionally, although the equity method of accounting does not capture the rise in market value in Magna Mining Inc. (“Magna”), that investment gain would have been $18.8 million if it had been accounted for using fair value.
PERFORMANCE FROM OPERATING SUBSIDIARIES AND JOINT VENTURES
Borborema Inc. (“Borborema”)
In the third quarter of 2022, the Corporation announced the closing of a transaction for Big River Gold (“BRV”), where a wholly-owned subsidiary of the Corporation retained a 20% interest in BRV through a joint venture arrangement with Aura Minerals Inc. (“Aura”). Borborema, through its subsidiaries, holds a development-stage gold project in the Serido region of the Borborema province in Rio Grande do Norte state, Brazil (“Borborema Gold Project”). The Borborema Gold Project is the sole asset of BRV. During 2022, the Corporation recognized a loss of $0.1 million from its share of loss from its investment in Borborema.
Goodman & Company, Investment Counsel Inc. (“GCIC”)
GCIC’s AUM decreased from $57.9 million at the end of 2021 to $35.3 million at the end of 2022, primarily due to the decline in market values. During the year, redemptions of AUM were $9.7 million.
During 2022, this segment incurred a pre-tax loss of $4.6 million (2021 – $1.2 million), which included non-recurring severance payments of $1.9 million associated with the wind down of its investment banking business.
Subsequent to year end, GCIC was pleased to announce that its latest vintage of tax-assisted limited partnerships, CMP 2023 Resource Limited Partnership, raised gross proceeds of approximately $10.2 million.
Dundee Sustainable Technologies Inc. (“Dundee Technologies”)
Dundee Technologies incurred a pre-tax loss of $3.5 million (2021 – $3.0 million) during 2022. Revenue and other income during the year was $3.9 million (2021 – $4.6 million).
Dundee 360 Real Estate Corporation
Dundee 360 recognized pre-tax earnings of $0.6 million (2021 – $2.0 million) from its operations. During 2022, Dundee 360 received a $3.1 million cash dividend from its Edenarc joint venture in France. Dundee 360 plans to continue its participation in this project until it reaches its conclusion, expected in 2023. At December 31, 2022, Dundee 360’s carries its investment in the joint venture at $6.8 million (2021 – $7.6 million).
AgriMarine Holdings Inc. (“AgriMarine”)
Subsequent to year end, AgriMarine closed the sale of its aquaculture operations, West Cost Fishculture (Lois Lake) Ltd (“WCF”). At December 31, 2022, the Corporation reclassified WCF’s assets and liabilities as held-for-sale and determined the net assets of WCF would be recovered principally through a sale transaction. During 2022, AgriMarine incurred a pre-tax loss of $13.1 million (2021 – $6.3 million), of which $13.0 million (2021 – $5.2 million) was incurred by its discontinued operations. Included in the $13.1 million pre-tax loss was $9.9 million (2021 – $3.0 million) of impairment charges.
GENERAL AND ADMINISTRATIVE EXPENSES
A key pillar in Dundee’s corporate strategy is to rationalize run-rate general and administration expenses (“G&A”) and streamline the corporate cost structure going forward. During 2022, the Corporation reported consolidated G&A of $25.3 million (2021 – $23.8 million). However, excluding one-time charges totaling $3.6 million relating to severances and an early termination fee on a lease, G&A declined by approximately 9% compared to the prior year. Continued material progress is expected to be made on this front in 2023, as savings from the wind-down of Dundee’s investment banking division and the sale of its aquaculture operations are realized.
SHAREHOLDERS’ EQUITY ON A PER SHARE BASIS
| Carrying Value as at | ||||||||
| Dec 31, 2022 | Dec 31, 2021 | |||||||
| Operating subsidiaries | $ | 26,691 | $ | 45,844 | ||||
| Equity accounted investments | 55,063 | 24,250 | ||||||
| Investments carried at fair value through profit or loss | 236,053 | 185,297 | ||||||
| Other net corporate account balances | 36,333 | 79,899 | ||||||
| Total shareholders’ equity | 354,140 | 335,290 | ||||||
| Less: Shareholders’ equity attributable to holders of: | ||||||||
| Preference Shares, series 2 | (27,667 | ) | (27,667 | ) | ||||
| Preference Shares, series 3 | (50,423 | ) | (50,423 | ) | ||||
| Shareholders’ equity attributable to holders of Class A | ||||||||
| Subordinate Voting Shares and Class B Shares of the Corporation | $ | 276,050 | $ | 257,200 | ||||
| Number of Class A Subordinate Voting Shares and Class B Shares of the Corporation issued and outstanding | ||||||||
| Class A Subordinate Voting Shares | 84,968,090 | 84,697,363 | ||||||
| Class B Shares | 3,114,491 | 3,114,491 | ||||||
| 88,082,581 | 87,811,854 | |||||||
| Shareholders’ Equity on a Per Share Basis | $ | 3.13 | $ | 2.93 | ||||
| * 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 audited consolidated financial statements as at and for years ended December 31, 2022 and 2021, along with the accompanying management’s discussion and analysis, as well as the annual information form, 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 including but not limited to, the strategic partnership with Aura Minerals Inc. and the future development of the Borborema Gold Project. 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 Relations
T: (416) 864-3584
E: ir@dundeecorporation.com
