DC.A Dundee Corporation

Dundee Corporation (TSX: DC.A) (the “Corporation” or “Dundee”) today announced its financial results for the three and six months ended June 30, 2023. All currency amounts in this press release are in Canadian dollars except as otherwise indicated.

SECOND QUARTER 2023 RESULTS

• Reported net income from portfolio investments for the second quarter of 2023 of $10.1 million (2022 – loss of $52.9 million). The key driver of performance during the quarter was the market appreciation in Reunion Gold Corporation by $20.6 million. The positive performance in the current quarter of 2023 was partially offset by a $3.5 million fair value decline on the warrants of Magna Mining Inc. Broad-based market weakness for mining stocks accounted for the remaining decrease. For the six months ended June 30, 2023, the Corporation reported net income from portfolio investments of $2.6 million (2022 – loss of $6.3 million).
• Reported consolidated general and administrative expenses for the current quarter of $4.2 million (2022 – $5.9 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 $2.6 million in the second quarter of 2023, declining 16% from $3.1 million incurred from the same period of the prior year.
• Reported share of loss from equity accounted investments for the second quarter of 2023 of $1.6 million (2022 – income of $2.3 million). For the six months ended June 30, 2023, Dundee reported a share of loss from equity accounted investments of $3.5 million (2022 – income of $2.2 million).
• Reported net earnings attributable to owners of the Corporation for the second quarter of 2023 of $1.8 million (2022 – loss of $44.5 million), or earnings of $0.02 per share, before the effect of any dilutive securities (2022 – loss of $0.52 per share).
• For the six months ended June 30, 2023, the Corporation reported a net loss attributable to owners of the Corporation of $9.5 million (2022 – $13.4 million), or a loss of $0.11 per share (2022 – $0.17 per share).

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

“Dundee is pleased to report a profit in an otherwise challenging market for mining stocks. The unwavering dedication and relentless efforts of our exceptional technical team is critical to identifying investments that can perform well in most market environments. A core holding of Dundee’s, Reunion Gold Corporation, announced its maiden resource estimate for its Oko West project during the second quarter and reinforced our conviction in its world-class stature. The company’s stock continues to trade near its all-time high. Reunion Gold plans to release a preliminary economic assessment on Oko West in the fourth quarter.”

“Subsequent to quarter-end, another core holding, Magna Mining Inc., announced the results from its completed preliminary economic assessment ("PEA") on its 100%-owned Crean Hill Project. The study pointed to potential favorable economics and paves the way for evaluating the economics of a fully integrated mining complex with its existing wholly-owned feasibility stage Shakespeare Project. Refer to Magna’s press release disseminated on July 31, 2023 for further details.”

“On factors that are within our control in the short-run, I am pleased to report continued progress in our cost-cutting initiatives. By continuing to shed non-core assets and reducing year-over-year general and administrative expenses by nearly 30% in the second quarter, we free up more resources that can be deployed to unlock shareholder value.”

“We believe depressed market valuations in the mining sector create an opportunity for Dundee and its shareholders, 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 public portfolio assets, whose share prices make up our underlying net asset value, 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 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 second quarter of 2023, the Corporation reported net earnings before taxes from the mining investments segment of $10.6 million (2022 – loss of $53.7 million). Performance from the mining investment portfolio contributed $11.5 million (2022 – loss of $53.7 million) to net earnings before taxes in this segment. The share of loss from equity accounted mining investments during the current quarter of 2023 was $0.9 million (2022 – $nil).

During the first six months of 2023, the Corporation reported net earnings before taxes from the mining investments segment of $0.9 million (2022 – loss of $6.4 million). Performance from the mining investment portfolio contributed $2.9 million (2022 – loss of $6.4 million) to net earnings before taxes in this segment. The share of loss from equity accounted mining investments during the first half of 2023 was $2.0 million (2022 – $nil).

Mining Services

During the three months ended June 30, 2023, the mining services segment, comprised of the Corporation’s 78% owned subsidiary, Dundee Sustainable Technologies (“DST”), reported a pre-tax loss of $1.2 million (2022 – $0.9 million). Subsequent to quarter-end, DST announced the sale of non-strategic operations and assets located at its Thetford Mines technical facilities. DST has entered into an agreement to sell the remaining portion of its processing contract and associated processing plant equipment and utilities (the “Transaction”). As part of the Transaction and under the asset purchase agreement, Dundee Technologies will receive total consideration of $0.9 million, in return for the processing contract and associated plant equipment.

During the first half of 2023, DST incurred a pre-tax loss of $2.4 million (2022 – $1.6 million).

Corporate and others

The Corporation reported a pre-tax loss from the corporate and others segment, including non-core subsidiaries, of $4.9 million (2022 – $1.3 million) during the three months ended June 30, 2023. During this period, the Corporation reported head office general and administrative expenses of $2.6 million, which decreased by 16% from the $3.1 million expense incurred from the same period of the prior year. During the first half of 2023, the corporate and others segment reported a pre-tax loss of $8.3 million (2022 – $7.0 million).

The fair value of portfolio investments in the corporate and others segment decreased by $1.5 million during the three months ended June 30, 2023 (2022 – increase of $0.7 million). The decrease 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 decreased by $0.3 million during the first half of 2023 (2022 – increase of $0.1 million).

Other subsidiaries and equity accounted investments contributed $0.7 million and $0.6 million, respectively, to this segment’s total pre-tax loss during the second quarter of 2023 (2022 – $1.8 million and pre-tax earnings of $2.3 million, respectively). During the first half of 2023, other subsidiaries and equity accounted investments contributed $2.0 million and $1.5 million, respectively, to this segment’s total pre-tax loss (2022 – $3.4 million and pre-tax earnings of $2.2 million, respectively).

SHAREHOLDERS’ EQUITY ON A PER SHARE BASIS

		Carrying Value				Carrying Value
		June 30, 2023				December 31, 2022
Mining Investments
Portfolio investments		$	169,798			$	168,598
Equity accounted investments			24,664				26,506
			194,462				195,104
Mining Services
Subsidiaries			3,797				3,081
			3,797				3,081
Corporate and Others
Corporate			29,336				36,333
Portfolio investments ‒ other			67,100				67,455
Equity accounted investments ‒ other			28,318				28,557
Real estate joint ventures			6,194				6,796
Subsidiaries			10,319				16,814
			141,267				155,955
SHAREHOLDERS' EQUITY		$	339,526			$	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		$	270,883			$	276,050
Number of shares of the Corporation issued and outstanding:
	Class A Subordinate Shares		85,377,729				84,968,090
	Class B Shares		3,114,491				3,114,491
Total number of shares issued and outstanding			88,492,220				88,082,581
SHAREHOLDERS' EQUITY ON A PER SHARE BASIS*		$	3.06			$	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 six months ended June 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.

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